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  • "Digital yen" demonstration experiment for 2 years from next year = Bank of Japan
"Digital yen" demonstration experiment for 2 years from next year = Bank of Japan
The Nikkei, a Japanese economic paper, reported on November 24th that the Bank of Japan plans to proceed with a demonstration experiment for issuing a "digital yen" next year.

According to media reports, the Bank of Japan plans to cooperate with private banks and others from next spring to verify whether there are any problems with depositing and withdrawing digital currency from bank accounts. We plan to check whether there are any problems in the environment.

After conducting experiments for about two years, the policy is to make a final decision on whether to issue the digital yen in 2026. The BOJ has begun coordinating with three major banks and a regional bank for a demonstration test, and the banks have responded positively to participating in the test, the Nihon Keizai Shimbun reported.

A digital currency issued by a central bank, also known as CBDC (Central Bank Digital Currency), has no risk of volatility in that it has the same value as traditional currency, unlike cryptocurrencies such as Bitcoin. In addition, unlike cryptocurrencies and electronic money issued by companies, it can be used anywhere as it is an alternative to real money. There is also less danger of money laundering and tax evasion.

The biggest advantage is that payment can be settled immediately through fund transfers between users. The Nikkei added, "With credit cards, it takes about a month for the user's payment to be deposited at the affiliated store, but with CBDC, payments can be made immediately even at night and on holidays, and there are no accounts receivables."

In addition, central banks around the world are actively considering issuing CBDCs because they can reduce the cost of producing paper or coins. According to the Bank for International Settlements (BIS), about 90% of the world's central banks, including the US Federal Reserve (Fed), are conducting CBDC-related research. The Bank of Japan has also started internal verification of CBDC issuance and circulation since last year.

In January, Governor Haruhiko Kuroda of the Bank of Japan commented on whether or not to issue CBDCs, saying, "My personal view is that we will decide whether or not to issue CBDCs by 2026."

Published : 2022/11/25 09:39 KST

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