Bank of Japan Prepares to Launch CBDC Pilot Program In 2023
In spring 2023, the BoJ will work with commercial banks and other organisations to identify issues with withdrawals and deposits. Also, the BoJ will work with commercial banks and other organizations in spring 2023 to identify any issues with deposits or withdrawals.
Japan joins the CBDC Race
According to the report, Japan’s central bank plans to continue its CBDC experiment for approximately two years before deciding whether or not to launch a digital currency in 2026.
This announcement comes as governments around the world intensify their efforts to promote CBDC and conduct research. China is leading this effort.
CoinGape reported that the New York Fed would be participating in a 12-week CBDC pilot program with five other banking heavyweights. This program will test whether it is possible to use digital dollars tokens to improve the settlement of central bank funds across institutions. The launch date for the pilot launch was announced by the Indian central bank.
Read more: India drops the final date for pilot launch of digital rupee
A BoJ official stated last year that the central bank’s goal is to ensure that a CBDC encourages competition among private payment providers, and is accessible to all members of society.
CBDCs are not for everyone
While most central banks are looking into the creation of digital currencies for central banks, some countries, such as Denmark, have decided not to participate in the CBDC race. The central banks offered a variety reasons why they had abandoned their CBDCs, including potential problems for the private sector and other disadvantages.
CBDCs may seem new, but they have been around for over three decades. The Avant smart card, which is an electronic version of cash, was launched by the Bank of Finland in 1993. The system was eventually discontinued in the early 2000s but it can still be considered the first CBDC in the world.
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