Japan is taking a slow and careful approach to the implementation of a Central Bank Digital Currency (CBDC). The Bank of Japan (BoJ) is working on the development of a careful use for its digital Yen and therefore not in a hurry to implement it. The Asian nation wants its digital Yen to be compatible with other CBDCs as well.
It is expected that the digital Yen will be released late in 2022 following an interview Hideki Murai granted Reuters. Murai is the Head of the ruling party’s panel on digital currencies. He said that the impact of a CBDC would largely affect financial institutions in the country.
Murai also noted that non-banking entities within Japan are offering Internet settlements and a shift would occur if commercial banks were handed the mantle to issue CBDC transactions. He also noted that the relationship between the Chinese Yuan and the Yen could change if the latter became an acceptable CBDC for tourists, thereby eroding the reputation of the Yen as a safe-haven currency.
Japan’s Journey to a CBDC Resolve
The Asian nation first disclosed intentions to launch a CBDC that would focus on the core principles and core features of CBDCs on the 9th of October. Japan announced 2021 to be the year it’d test the multiple phases of a CBDC development. True to its intentions, the BoJ launched the first phase of its CBDC pilots in April 2021.
CBDCs have been on the game plan of a lot of other countries. The move for CBDCs was pioneered by China after flushing out Bitcoin miners. Other countries like Russia, the US, the UK, Sweden, and the Bahamas have taken to pioneer the concept. However, no nation has approved a CBDC yet.