Japan will start a pilot programme to test the use of a digital yen in April, joining a growing number of countries seeking to launch their own central bank digital currencies (CBDC), the Japan central bank announced Friday.
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Fast facts
- The long anticipated move follows two years of experiments that the Bank of Japan (BOJ) has been conducting to decide on issuing a CBDC and to move Japan closer to issuing a digital yen in the next several years.
- “Our hope is that the pilot programme will lead to improved designs through discussion with private businesses,” BOJ executive director Shinichi Uchida said in a meeting with private-sector executives, according to a report from Reuters.
- In the meeting, Kazushige Kamiyama, head of the BOJ’s department overseeing the development of a CBDC, said: “to a certain extent, we need to move in lockstep with other advanced economies in deciding on the timeframe.”
- Central banks around the world have stepped up efforts to develop their own digital currencies in order to speed up domestic and international payments, led by China which is already running pilot schemes for CBDC use for retail payments.
- Under Japan’s pilot programme, the BOJ will conduct simulated transactions with private entities in a test environment, in anticipation of a potential digital yen.
- The pilot programme will last for several years and involve discussions with commercial banks, non-bank settlement firms and carriers.
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