The Bank of Japan BOJ today, Monday, began experiments to study the feasibility of issuing a digital currency for the CBDC, making it join the efforts of other central banks that aim to keep pace with the innovation in the field achieved by the private sector.
The Bank of Japan said on statementWe are making preparations to start trials of CBDC in early fiscal year 2021 to test the technical feasibility of the basic functions and features required for CBDC digital currency.
He added: With the necessary preparations now complete, the first phase of PoC begins today, and the bank plans in the first phase of PoC to develop a testing environment for the central bank’s digital currency system and to conduct experiments on the basic functions that are essential to the central bank’s digital currency system as a payment tool, such as: Release, distribution, and recovery.
This phase is implemented until March 2022, that is, for a period of one year, and the Bank of Japan then moves to the second phase of experiments that scrutinize more detailed functions, such as whether restrictions are placed on the amount of digital currencies that each entity can hold.
Bank of Japan (Shinichi Uchida) CEO Shinichi Uchida said last month: The central bank will, if necessary, launch a pilot program that includes payment service providers and end users.
Uchida told a committee of policymakers and banks looking at CBC currencies: Although there is no change in the Bank of Japan’s position, it currently has no plan to issue a digital currency to the central bank, and we believe that starting experiments at this stage is a necessary step.
Global central banks are looking to develop digital currencies to modernize their financial systems, ward off the threat from cryptocurrencies, and accelerate domestic and international payments.
While China is at the top of the group, the Bank of Japan has been accelerating efforts to catch up with the plan announced in October to begin experimenting with how to operate its own digital currency.