In April, Japan will begin a pilot program to explore the usage of a digital yen, joining a growing number of nations trying to create their own central bank digital currency (CBDC), according to an announcement by the Japan central bank on Friday.
The long-awaited action follows two years of trials conducted by the Bank of Japan (BOJ) to decide on releasing a CBDC and bringing Japan closer to issuing a digital yen in the coming years.
According to a report by Reuters, BOJ executive director Shinichi Uchida said at a meeting with private-sector leaders, “Our aim is that the pilot program would lead to better designs via dialogue with private enterprises.”
At the conference, Kazushige Kamiyama, chairman of the BOJ’s section supervising the construction of a CBDC, said, “to a certain degree, we must decide the timeline in parallel with other advanced economies.”
The world’s central banks have increased their attempts to build their own digital currencies in order to speed up internal and international payments, with China leading the way by implementing CBDC retail payment trial program.
In preparation for a potential digital yen, the BOJ will perform simulated transactions with private businesses in a test environment as part of a pilot operation in Japan.
The pilot initiative will span a number of years and include conversations with commercial banks, non-bank settlement providers, and carriers.
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