- BOJ has been working on this for the last two years.
- Uchida also intends to achieve better designs via conversations with private enterprises.
Many nations increased their work on central bank digital currency (CBDC) in the middle of 2022’s brutal bear market. Now, it seems that Japan is also heading on a similar path. It was recently announced that the Japan CBDC, or digital yen pilot programme, is scheduled to launch in April.
It is important to remember that the BOJ has been working on this for the last two years. To think about how to introduce the CBDC is part of this. The bank’s most recent action, testing the CBDC, may help it choose when to officially introduce the product.
BOJ Executive Director Shinichi Uchida stated:
“If a CBDC were to be issued in the future, exploring its framework in such a phased manner and engaging in highly transparent communication with the private sector are necessary steps to take for adoption in society.”
Catching Up With China
Uchida also intends to achieve better designs via conversations with private enterprises through this approach. Uchida claims that the BOJ would treat the pilot programme as a real-world experiment by simulating interactions with commercial financial institutions. Yet, the bank has zero intentions to initiate any kind of inter-store or customer-banking operations.
Japan is rushing through the CBDC process for one main reason: it wants to catch up to China. Government officials in China were among the first to work on CBDC. And the nation is already using the digital money known as e-CNY. Japan is apparently striving to catch up to China in the worldwide CBDC competition.