The Bank of Japan has taken on the CBDC path with plans to launch an experimental CBDC. According to a Japanese media outlet, Nikkei, the Bank of Japan (BoJ) will take on the digital yen experiments with three megabanks and regional banks in Japan.
Earlier in June 2022, the Japanese parliament approved a bill designating stablecoins as a digital currency and also enacted a legal framework for stablecoins.
BoJ is looking to launch the CBDC experiment in the spring of 2023, in partnership with private banks and other organizations, to point out deposits and withdrawals related problems, the report by Nikkei stated. They would also ensure that a central bank digital currency (CBDC) can operate in the case of natural disasters and places short of internet access.
Discussion and decision to issue a CBDC by the Central Bank will follow in 2026 after two years of the experiment.
By developing a test environment for a digital yen, the BoJ is on the list of central banks around the world exploring CBDCs and their basic utilities, distribution, and redemption.
As stated by a BoJ official, “it is the central bank’s priority to ensure a CBDC enables competition between private payment providers and be universally accessible by the public.”
The three megabanks in Japan, which are expected to be the banks referred to in the report, have not been revealed but could include Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc., and Mizuho Financial Group Inc.
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