Japan has entered the race of creation of a digital version of its national currency. The Bank of Japan has launched experiments to study “the feasibility of issuing its own digital currency”.
“The first phase of experiments, to be carried out until March 2022, will focus on testing the technical feasibility of issuing, distributing and redeeming a central bank digital currency (CBDC),” the BOJ said in a statement. The second phase of the experiment will scrutinize the main functions of CBDC as a payment instrument such as “whether to set limits on the amount of CBDC each entity can hold”. The central bank noted that this stage of the experiment would last until March 2022.
“The Bank of Japan has been undertaking preparations to begin experiments on the Central Bank Digital Currency (CBDC) in early fiscal year 2021, to test the technical feasibility of the core functions and features required for CBDC. As necessary preparations are now complete, Proof of Concept (PoC) Phase 1 begins today,” the regulator said.
Thus, the BOJ will join those central banks that last year, announced that they might launch their own digital currencies. At the moment, China is leading the race followed by Europe and the US.