Japan to experiment with the issuance of a digital yen in 2023
(Kitco News) - The Bank of Japan (BoJ) has announced its intention to continue exploring the possibility of creating a central bank digital currency (CBDC) for the island nation, according to the local news agency Nikkei.
The next phase of the central bank’s investigation will involve a collaboration with three megabanks and regional banks in the country to conduct a CBDC issuance pilot aimed at providing demo experiments for the issuance of a digital yen beginning in spring 2023.
One of the main goals of the new pilot program will be to test the offline functionality of a Japanese CBDC in an effort to explore making payments without the internet. The trial will see the BoJ cooperate with major private banks and other organizations to identify and solve any major issues related to customers' ability to conduct deposits and withdrawals in their bank accounts.
This phase of the experiment is scheduled to last for roughly two years, which will give the BoJ ample time to evaluate the system and decide whether it wants to officially issue its digital currency by 2026, the report said.
Japan is one of over 100 countries exploring the creation of a CBDC to advance its monetary system into the digital age.
Yesterday, Kitco reported that the Reserve Bank of India has announced its intention to move forward with the next phase of its pilot program for a retail digital rupee following the completion of trials for a wholesale digital rupee. The retail digital rupee trial is expected to start in December.
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Even the U.S. is getting in on the action with the New York Federal Reserve recently announcing its intention to launch a 12-week pilot project in collaboration with some of the largest banks in the country for a proof-of-concept CBDC pilot.
China is currently the global leader in the race to release a widely-adopted CBDC, but the competition is getting fierce as the major economies of the world are increasingly ramping up their efforts to develop digital fiat to integrate with society.
The UK is also pushing forward with their CBDC, as noted in a recent speech by Jon Cunliffe, deputy governor of the Bank of England. “Our work on a digitally native pound is driven by the trends we now see both specifically in payments, including the reducing role of cash, and more generally in the increasing digitalization of daily life,” Cunliffe said.