The Bank of Japan (BoJ), the country’s central bank, will conduct experiments with three megabanks and regional banks on a digital yen, according to a report by Nikkei on Wednesday.
See related article: Indonesia’s wholesale CBDC to be ready for bank use by year end: report
Fast facts
- BoJ will collaborate with private banks and other institutions from the spring of 2023, to study any problems with withdrawals and deposits in bank accounts, the report said.
- The central bank would also study if its central bank digital currency (CBDC) can work in a natural disaster and even in locations without internet.
- BoJ intends to conduct the experiment for about two years before deciding on whether to issue a digital yen in 2026, according to the report.
- Japan’s central bank began experiments in April last year to test the technical feasibility of a CBDC.
- Several central banks across the globe are experimenting with CBDCs, a form of digital money that represents a direct claim on the central bank. Singapore’s central bank recently partnered the New York Fed to explore wholesale CBDCs, while India’s central bank has started a pilot run of wholesale CBDCs with nine banks.
- See related article: Digital dollar takes another step in White House’s “first ever” digital assets framework
