Japanese Digital Yen Pilot to Begin ‘in Early 2023’
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The Bank of Japan could begin piloting a digital yen as early as spring 2023, and is said to be starting a trial involving “consumers and private sector companies.”
According to Nikkei, sources close to the matter confirmed that the Bank of Japan (BoJ) is close to completing its “basic operations” tests for a prototype central bank digital currency (CBDC). Assuming there are no last-minute problems, the BoJ will then move to a “second-stage pilot test” that “starts in spring 2023”.
The BoJ has previously said it wants a “second phase of pilot tests” to “engage private businesses and consumers”.
The same media outlet claimed that the BoJ is already in talks with “three megabanks” as well as several regional banking players ahead of the pilot. It also added that these finance companies had a “positive attitude” to the pilot.
How close is Japan to adopting a digital yen?
The BoJ is interested in experimenting with things such as transaction speeds and the accumulation of interest in the new phase of the pilot.
But it seems likely that the bank wants to go ahead with the pilots, unlike in nearby China. Beijing has virtually launched its digital yuan in several of its biggest financial centers – and has experimented with both online and offline functionality.
Unlike the Chinese CBDC, which does not directly use blockchain technology, the BoJ prototype is more likely to utilize some of the IT developments used in cryptoassets.
The BoJ has repeatedly stated that it is “yet to decide” whether it will actually seek to launch a CBDC.
Instead, it has stated that “national consensus” would need to be reached before the badge could be published.
BoJ Governor Haruhiko Kuroda told a parliamentary session in January this year that a decision on digital yen issuance may not come until 2026. However, the rapid pace of Japan’s pilot development seems to suggest otherwise.