The Bank of Japan’s initiative for a digital Yen has entered its second stage which centered around restrictions on holdings and transactions, as stated in the press release.
The first stage completed in March focused on issues related to the basic functions of a CBDC, including its issuance, withdrawal from financial institutions, and transfers between them.
April marked the onset of the second phase that revolved around implementing measures such as preventing funds from being shifted from bank deposits to a CBDC which it claims threatened financial system stability.
Specifically, the BOJ is examining restrictions on the maximum amount of a CBDC that a person can hold and that can be transferred at one time. Issues related to holders of multiple CBDC accounts at different financial institutions will also be studied.
As per the P.A, BOJ plans to complete the second stage in March next year. It also intends to conduct a pilot test involving the participation of consumers and businesses in the future.
Japan’s Central Bank takes inspiration from Swedish Model
Japan after a careful and thorough analytical approach toward the introduction of its central bank digital currency (CBDC), has decided to take a leaf out of Sweden’s detail-oriented approach to digital currencies.
This was revealed by the Head of the payments system department at the BOJ, Kazushige Kamiyama, who in a recent interview said that the Bank of Japan would follow a model similar to Sweden’s for its central bank digital currency and not China’s as previously believed.
“Japan has a strategy to launch the digital currency slowly and steadily rather than implementing large pilot programs in bulk right from the beginning”, one report said.
Kamiyana asserted that the gradual expansion that Japan is planning to adopt was inspired by Sweden and is “suited best for the country.” He further said that the design and framework of the central bank’s digital currency need to be considered as part of a system of overall settlement for the future.
The Bank of Japan governor, Haruhiko Kuroda, said that a decision to issue a CBDC would be made only by 2026.