March 30, 2021
By Sharan Kaur Phillora
While the Bank of Japan has stated that it currently does not have any plan to issue its own digital currency, it will be prepared to respond to changing circumstances.
Here’s what we know:
The Bank of Japan plans to launch the first phase of its central bank digital currency (CBDC) experiment, joining counterparts aiming to match the rapid pace of private innovation. This move will also play a key role in deciding on pilot programs and the eventual launch of the digital Yen.
“By around the end of next year, we’ll have a clearer view of what Japan’s CBDC would look like,” Hideki Murai, who heads the ruling Liberal Democratic Party’s panel on digital currencies, told Reuters in an interview.
While no immediate decision will be made on whether to issue a CBDC, more details on its design may spur debate on how CBDC issuance could affect financial institutions, he said.
Murai also said the BOJ must ensure a digital yen is made compatible with the CBDC of other developed nations partly to counter China’s rapid progress towards issuing a digital yuan.
The BOJ is among a group of seven major central banks jointly looking into the core features of CBDCs.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
