The Bank of Japan (BOJ) has already started making progress on its CBDC currency. In April this year, the BOJ has successfully rolled out the first phase of its CBDC experiment, and the second phase is expected to be finished this year.
Japan’s central bank is working with the Bank of International Settlements (BIS) together with the other seven major central banks in the CBDC experiment. The purpose of this collaboration is to set the standards and major features of a CBDC before rolling it out to the public.
BOJ expects that once the official design and features of CBDC have been finalized and announced, debates on how it would affect financial institutions would certainly arise.
Also, a CBDC would certainly be a competitor for non-bank retailers who are already providing various types of online settlement solutions in Japan.
The upcoming CBDC will not only face challenges at home but also abroad, in which the main threat is the rapidly increasing influence of China’s digital yuan. With this, Japan will try to counter yuan’s influence by making its CBDC compatible with other countries’ official digital currencies.
Skepticism about the digital yuan
While it’s easy to expect the success of the digital yuan because of China’s clout on the global stage, some are skeptical about its real impact.
Kazushige Kamiyama, Bank of Japan’s spokesperson, said that no one should fear the digital yuan, not Japan and even the United States.
He said that with today’s fast-phased technology, there’s a high chance that digital yuan’s tech could become outdated sooner than later. The spokesperson also added that digital yuan lacks key features such as security, stability, and tight restrictions.
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