CBDC Trial to be Launched in April by Japan Central Bank

Only 4% of Japan’s total population uses or owns cryptocurrencies.
Experimental testing of the digital yen is expected to begin in April 2023.

The Bank of Japan revealed on February 17, 2023, that it plans to launch a pilot program in the month of April 2023 to issue digital yen. In addition, the Bank is working hard to launch its own Central Bank Digital Currency(CBDC) in Japan to ease payment systems.

During a Central Bank meeting with private-sector executives Shinichi Uchida, Executive Director of Bank of Japan, said, “our hope is that the pilot program will lead to improved designs through discussion with private businesses.”

The concept of CBDC became popular after Nigeria and China successfully tested their digital currencies and made them available to the public. The United Kingdom and UAE, among others, are in the process of preparing a road map for launching and regulating their central bank digital currencies.

The Central Bank noted that it depended on the public whether to issue a digital yen. Therefore, the Bank of Japan will “continue to make thorough preparations” and launch the CBDC as per the suitable circumstances.

Since CBDCs are based on blockchain technology, they are similar to cryptocurrencies.

In April of 2022, Kazushige Kamiyama, head of the payment system department at the Central Bank of Japan, revealed in an interview that Japan was taking a different approach to its Central Bank Digital Currency (CBDC) than China. Instead of launching massive pilot programs straight away (as China is doing), Japan has taken a more deliberate approach. Modeling itself after Sweden’s model, the Bank of Japan plans to proceed cautiously, preferring to roll out the digital currency steadily and slowly over time.

There are over 90 countries worldwide that are reviewing and considering Central Bank’s Digital Currencies; however, these numbers seem likely higher. This is because the governments of those countries are waiting eagerly to tap into benefits and upgrade the legacy financial systems.

In recent months, the world of CBCDs has seen a surge in activity as more countries look to accelerate their digital currency problems. China has continued to lead the pack in its digital currency program; however, other nations have followed suit.

The United Kingdom and India are among those that have stepped up their effort to develop a digital currency of their own. This swift and concentrated progression into the world of CBDCs will bring about potentially ground-breaking changes to both local and global markets.

In early October 2022, the Bank of Namibia launched “Virtual assets and Virtual assets service providers.” It further noted that cryptocurrencies are not legal tender in the country, so the Bank has found “virtual assets (VA) and virtual assets service providers(VASP) under its Fintech Innovation hub.”

In the coming time, CBDCs blended with blockchain will speed up the traditional banking system and let the general public make digital payments. The major benefit of CBDC is that it does not need any associated credit or liquidity risk.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing