Japan Also Launches Digital Currency Experiment

Japan Bank Digital Currency Pilot Project Launched
Conducted for One Year from April to March Next Year

▲Haruhiko Kuroda, Governor of the Bank of Japan [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The Bank of Japan, Japan's central bank, is set to conduct experiments on digital currency (CBDC).

On the 6th, the Nihon Keizai Shimbun reported that the Bank of Japan (BOJ) will begin a year-long pilot test of CBDC from April until March 2022.

The CBDC experiment conducted by the Bank of Japan will proceed in three stages. First, in stage one, the system will be built and technical verification of basic functions such as CBDC issuance, distribution, and remittance will be carried out. In stage two, pilot tests will be conducted on usage in environments with limitations such as setting upper limits on holdings and communication failures. In stage three, pilot tests involving private sector businesses and consumer participation will be carried out.

The Bank of Japan's experiment is interpreted as a move in line with global trends. According to a report by the Bank for International Settlements (BIS), 60% of 65 countries worldwide are conducting digital currency experiments. Among them, countries and regions with the possibility of issuing digital currency within the next three years account for one-fifth of the world.

The first movers were the Bahamas, an island nation in the Caribbean of Latin America, and Cambodia in Asia, which issued digital currencies in 2020. Subsequently, in 2021, economic powers such as the European Union (EU), China, and Japan also began to take action. The United States remains cautious about digital currency and has yet to announce concrete plans. However, as China is moving proactively in the digital currency field, voices advocating that the U.S. should take the lead are gaining traction.

Major foreign media evaluated, "The existing financial system is being shaken by cryptocurrencies issued by the private sector, increasing the Bank of Japan's sense of crisis," and "The Bank of Japan is accelerating efforts to catch up with the plans of other central banks."

This content was produced with the assistance of AI translation services.