We thought he was stillborn, because he was devoid of interest in the eyes of the Japanese. The digital yen is back on track: the Central Bank of Japan plans to issue it by 2026. Recently, 3 Japanese megabanks have agreed to carry out CBDC transactions from 2023.
Digital yen, rebirth
At the beginning of August 2022, the BoJ announced the end of its digital yen project after it noticed a lack of interest from future users. Three months later, the same institution decides to reactivate the same program. Yesterday, November 23, Nikkei reported that the Bank of Japan called on the three major local banks to test its CBDC.
” The Bank of Japan has established a collaboration with the 3 megabanks and regional banks to conduct demonstration experiments for the issuance of the “digital yen”. From the spring of 2023, we will cooperate with private banks and other organizations to check whether there are problems with deposits and withdrawals from bank accounts. In case of inconvenience, the client should check if the CBDC can operate in a place without internet. [La BoJ] plans to continue the experiment for about two years and decide on its issuance in 2026. »
So, the takeaways from this text are:
- the Bank of Japan will begin testing with its digital yen from spring 2023;
- three local banks will support this program spread over 2 years;
- private banks will also incorporate BoJ’s CBDC in the near future;
- the pilot will also include offline functionality testing of the digital yen.
Currently, several banks are working on the development of Central Bank Digital Currencies (CBDCs). Apart from the Bank of Denmark and that of Nigeria, which put a cross on its project, the Reserve Bank of India and the Federal Reserve Bank of New York, among others, have already embarked on this adventure. Like the BoJ, they have also called on banking giants for similar tests.
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