Japan Will Soon Test Its National Digital Yen (CBDC)

Although it rejected plans to test CBDC in April, the Bank of Japan announced that it will begin testing the digital currency in early 2023.

Reporting from the Nikkei newspaper, Bank of Japan (BoJ) planned to test the digital yen with three megabanks and regional banks in the country,

Starting in the spring of 2023, the BoJ will work with private banks and other institutions to identify any problems with deposits and withdrawals and test whether a digital currency of Central bankers (CBDCs) can operate during natural disasters and also in areas without internet access, according to the report.

Although the report does not name the banks, Japan’s “three super banks” usually refer to Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc.

The BoJ joined a growing list of central banks worldwide exploring CBDCs last year, by developing a test environment for the digital yen and exploring basic functions such as operation, distribution and acquisition.

Last year, a BoJ official said that the central bank’s priority was to ensure that CBDCs that enable competition between private and public payment providers are globally accessible.

The report states that the trial will last two years and the central bank will decide to issue a CBDC in 2026. This statement can be seen as a “surprise turn” by the Japanese financial institution because before It still insists that there are no plans to release a CBDC.

On the other hand, even though the country is getting stricter with crypto, the metaverse and NFT segments here are still gaining a lot of momentum.

As reported, most of the major economies today are rapidly developing state-backed digital currencies, such as the United States, the European Union, China or Nigeria…

Recently, on November 23, Jon Cunliffe, deputy governor of the Bank of England, commented that while these tests may not be successful, it is important for central banks to want a liquid asset. commonly used digital math. He also warned that a few large commercial players could dominate and control key payment services.