Japanese To Begin Digital Yen Pilot by Next Year 2023
Japanese Government is considering digitalizing YEN by the next year 2023, as soon as possible. Read More in the details below.
Japanese central bank working for Digital YEN.
The Japanese central bank is apparently planning to launch a trial involving “consumers and private sector enterprises” in the spring of 2023 to test the viability of the digital yen.
The central bank digital currency (CBDC) prototype is nearing completion of the Bank of Japan’s (BoJ) “basic functionalities” tests, according to persons familiar with the situation who spoke with Nikkei. The BoJ will then proceed to “second-phase pilot testing,” which “will begin in the spring of 2023,” assuming there are no last-minute issues.
The BoJ has previously indicated that “private enterprises and consumers” should be involved in “second-phase pilot studies.”
According to the same media site, the BoJ is already in discussions with “three mega-banks” and a number of regional banking firms in advance of the pilot. The fact that these financial institutions had “a good attitude” toward the pilot was also highlighted.
How soon will the Japanese introduce the digital yen?
In the new phase of the pilot, the BoJ is eager to test concepts including transaction speeds and interest accrual.
However, it seems likely that the bank will wish to proceed with pilots that are similar to ones being carried out in neighboring China. In a handful of its largest financial centers, Beijing has effectively launched its digital yuan, and it has experimented with both online and offline capabilities.
However, the BoJ’s prototype is more likely to make use of some of the IT advancements employed in crypto assets, in contrast to the Chinese CBDC, which does not directly use blockchain technology.
The BoJ has asserted time and time again that it has “still to decide” whether it will actually try to start a CBDC.
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In its place, it has been declared that a “national consensus” must be reached before a token can be introduced.
In January of this year, BoJ Governor Haruhiko Kuroda told a parliamentary hearing that a decision regarding the issuing of digital yen might not come until 2026. The rapid pilot development in Japan would seem to indicate different, though.