Bank of Japan Announces Latest CBDC Pilot

Japan will launch a pilot program in April to test its digital currency Yen. This was announced by the Bank Of Japan Friday. This initiative aims to examine the potential benefits and challenges associated with a digital currency Yen, which could eventually lead to its adoption as a legal currency in Japan.
In the last two years, Bank of Japan has been testing digital currency launch plans for CBDCs. Although the country has not been digitizing its payment systems actively, this was highly anticipated.


The Japanese citizens had the right to decide whether they wanted CBDC to be issued. However, if the government decides that a digital currency is necessary, the central bank will be ready for it.
What drove CBDC issuance in Japan
This news comes amid reports that major countries are preparing to launch their own CBDC under the leadership of China. This information was also made public prior to the Bank of Japan’s upcoming leadership change from Haruhiko Kuroda, academic Kazuo Ueda. Kuroda’s term as BOJ governor ends in April and Ueda will succeed him.

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BOJ’s view on the pilot survey of CBDC
Shinichi Uchida, Executive Director of BOJ, stated that they are optimistic that the pilot program will allow them to develop better and more efficient methods for CBDCs. He said that future issuances of a Central Bank Digital Currency, (CBDC), will be more successful if they are approached in a gradual way and communicate with the private sector. This will ensure its widespread adoption in society.

Uchida said that the BOJ will conduct simulated transactions with private financial institutions during the pilot program. Uchida said that the bank does not plan to conduct transactions involving retailers and consumers.
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