Japan to Launch CBDC Pilot Program in April 2023
Japan is set to launch a pilot program for its central bank digital currency (CBDC), the digital yen, in April 2023. The Bank of Japan (BOJ) has been working on the project for the last two years and hopes to use the pilot program to improve the design of the CBDC through discussions with private businesses.
JUST IN: 🇯🇵 Japan to launch digital yen (CBDC) pilot in April.
— Watcher.Guru (@WatcherGuru) February 17, 2023
Rush To Catch Up With China
BOJ Executive Director Shinichi Uchida emphasized the importance of engaging in transparent communication with the private sector as a necessary step for adoption of the CBDC in society. The BOJ plans to replicate interactions with private financial institutions as part of the pilot program, although there are currently no plans to carry out transactions between stores and customers.
The primary reason for Japan’s fast-tracking of the CBDC process is to catch up with China, which was one of the first countries to develop a CBDC. The e-CNY digital currency has already been put into use in China, putting Japan in a position where it needs to move quickly to keep up with its neighbor.
Implications For Japan And Global Economy
In addition, the pilot launch is set to occur before the end of BOJ Chief Haruhiko Kuroda’s second five-year tenure, with scholar Kazuo Ueda expected to take over. With several countries still assessing their decision on rolling out a CBDC, Japan could be getting ahead of the game.
The launch of the digital yen CBDC is expected to have significant implications for Japan’s economy and the global CBDC race. While the full-fledged launch of the digital yen is still uncertain, the pilot program could provide important insights into the potential of CBDCs and their impact on the financial industry.
