In its recent article, Reuters has reported that the Bank of Japan (BOJ) has begun research on the feasibility of making its own CBDC (central bank digital currency).
BOJ's experiments with the digital yen
It is following in the footsteps of other central banks around the world. The Bank of China (PBOC) is the leader in these activities so far, as it has been working on the digital yuan since 2015 and has been trialing the CBDC widely in China since last year.
The Federal Reserve is also considering moving in this direction, as well as the ECB and central banks of other countries.
According to Reuters, phase one of these experiments will last until March of next year. It will be focused on tests related to the feasibility of launching, distributing and redeeming the digital yen.
During the second phase next year, the focus will be more on the detailed functions of the CBDC, e.g., setting limits on the size of individual holdings of the digital analog of the yen for users.
Launch of CBDC pilot program being considered
BOJ also eyes launching a trial program for testing the currency on providers of payment services and users in Japan, according to the executive director of BOJ, Shinichi Uchida.
He stated that the bank does not plan to issue its CBDC at this time. However, BOJ finds it necessary to start experimenting in this area.
Earlier, U.Today cited The Japanese Times, which stated that the Bank of Japan plans to issue its own cryptocurrency by 2023.
As for other central banks, recently the head of the ECB, Christine Lagarde, said in an interview that launching the digital euro may take four years or perhaps longer.
Unlike Bitcoin or other crypto, digital currencies issued by central banks are under the full control of the state and are basically fiat currencies in digital form.