Bank of Japan begins CBDC experiment along with leading institutions
Japan central bank has begun planning of a central bank digital currency (CBDC) experiment on the digital yen, with the nation's key financial firms starting in spring 2023.
The Bank of Japan is collaborating with three megabanks and other top Japan regional banks in the Asian country and will work for CBDC issuance pilot.
The BOJ experiment will test a digital yen next year. BOJ will examine how deposits and withdrawals can operate with a digital yen. As part of the test, BOJ will be detecting and solving any issues related to customer deposits and withdrawals on bank accounts.
Tests will be conducted on the offline functionality of Japan's possible CBDC, which will target payments without the use of the internet. The central bank of Japan plans to conduct a CBDC experiment for about two years before planning to release a digital currency in 2026 as per report.
Other countries working on launching CBDC research
Several countries are launching CBDC research and development initiatives with China being the leading country. In India with the cooperation of significant regional banks including the State Bank of India, the Reserve Bank of India is planning ready to launch a retail test of the digital rupee in December.
In conjunction with major American industry leaders like BNY Mellon, Citi, HSBC, and others, the Federal Reserve Bank of New York's Innovation Center announced the start of a 12-week proof-of-concept CBDC pilot in the middle of November.
The Bahamas has introduced its own CBDC in 2020.
Some countries are against the idea of introducing CBDC Some nations, like Denmark, are not planning to introduce a CBDC giving a variety of reasons for abandoning their CBDC or CBDC-related projects, including potential challenges for the private sector, dubious value and advantages, and other problems.
CBW - External Analyst