The Reserve Bank of Japan plans to decide on issuing a digital currency by 2026, a potential digital yen. The Bank of Japan has started a collaboration with three megabanks and regional banks to test CBDC issuance, local news agency Nikkei reported on Nov. 23. The pilot project aims to provide demonstration experiments for the edition of Japan’s national digital currency. Currency, the digital yen, from spring 2023.
As part of the test, the BoJ is expected to work with major private banks and other organizations to identify and resolve any issues related to customer deposits and withdrawals from bank accounts. The functionality of Japan’s potential CBDC targeting offline payments.
The report said that the Bank of Japan plans to continue its CBDC experiment for about two years and decide whether to issue a digital currency by 2026. The news comes amid countries worldwide that are increasingly embarking on CBDC research and development initiatives, with countries like China leading the global CBDC race. On Nov. 22, the Reserve Bank of India is preparing to launch a digital rupee retail pilot in December in partnership with major local banks, including the State Bank of India. In mid-November, the Federal Reserve Bank of New York’s Innovation Center announced the launch of a 12-week CBDC proof-of-concept pilot program in partnership with banking giants such as BNY Mellon, Citi, HSBC, and others.
While most of the world rushed to adopt a CBDC, some countries like Denmark have pulled out of the digital currency race. Among the reasons for abandoning their CBDCs or CBDC-related projects, central banks cited potential difficulties for the private sector, questionable value and benefits, and other issues. Despite this, the central bank has yet to completely rule out the possibility of introducing a CBDC.