Key takeaways:
- To debate a central bank digital currency (CBDC), the Bank of Japan (BoJ) and the nation’s government convened for the first time.
- A report from an expert panel inside the Ministry of Finance was sent to the BoJ in December 2023, recommending issuing a digital yen “without delay.”
To debate a central bank digital currency (CBDC), the Bank of Japan (BoJ) and the nation’s government convened for the first time.
The BoJ and the government decided on January 26 to settle the legal disputes surrounding the issuance of digital yen in the spring of 2024, according to the local TV station NHK.
The government and the Bank of Japan have not formally acknowledged the introduction of the digital yen, according to the article. After “a national discussion,” a decision will be made no later than 2026.
A report from an expert panel inside the Ministry of Finance was sent to the BoJ in December 2023, recommending issuing a digital yen “without delay.” According to the research, the BoJ should reduce the amount of personal data it stores, and the CBDC should coexist with cash.
After a year-long trial that involved 100,000 users and five intermediaries with loads of 500 and 3,000 transactions per second, the BoJ wrapped up the second phase of CBDC testing in May 2023.
Once the trial was deemed successful, the BOJ proceeded to the planned CBDC pilot project, which will look at “end-to-end process flow” and more integrations with external systems.
Though, for instance, in the United States, lawmakers and presidential candidates are spearheading a campaign against CBDCs, Japan continuously adopts a supportive attitude towards them despite its reputation around the world as a “cash-based” culture.
On the other hand, the BoJ’s pro-CBDC stance does not translate into an anti-crypto policy. Taxes on “unrealized gains” from cryptocurrency holdings may be waived for local enterprises starting in April 2024.
Asia continues to be more accepting of CBDCs; South Korea, Hong Kong, Singapore, Malaysia, India, and China are all researching CBDCs, and China has already begun to adopt its digital yuan progressively.
At the beginning of January, the National Bank of Cambodia declared that by the end of 2024, the nation would have a CBDC. The bank declared, “The process of introducing ‘Lanka Pay’ and ‘Central Bank Digital Currencies’ has already begun.”
Recently, the central bank of the United Arab Emirates carried out its first cross-border digital dirham transfer using the mBridge CBDC technology. Joining the mBridge platform allows many commercial banks from each participating member nation to work together on infrastructure and technology.
