Bank Of Japan (BoJ) Launches ‘Technical' Study to Experimenting CBDCs

The race to launch a sovereign digital currency is heating up as Japan became the latest country to venture into a central bank digital currency (CBDC). In a report released by the Bank of Japan (BoJ) on Friday, July 3, 2020, the bank will start experimenting with a digital yen to check the technical feasibility of adopting a CBDC in the country.

The report, titled “Technical Hurdles for a CBDC,” will look into the launch of a digital Yen from a technical perspective with several central banks participating in the research. This marks the first time the central bank is speaking on a digital yen following in the footsteps of the People’s Bank of China (PBoC).

The latter central bank announced the plans to launch a CBDC back in 2017 and has quietly been developing its digital yuan. Reports to BEG late last month from the Vice-Chair of the Digital Yuan committee confirmed that the back end of the Digital Currency Electronic Payment project is complete with testing in some of the provinces already launched.

Japan aims at similar progress in its project, but the statement mentioned two significant challenges the digital yuan faces before development commences.

The first hurdle the CBDC faces is universal access, which means that everyone in Japan should be able to use the digital yuan whether you have access to a smartphone or not. The second is the resilience of the CBDC, which means that the stablecoin should be available at all times whether there’s an emergency, ‘earthquake’ – no lag should be in the system at any time too.

A question of governance?

The question that most central banks have to deal with is the overall governance of the CBDC. Both the decentralized systems and centralized systems have their pros and cons, hence the dilemma facing the Bank of Japan.

In the decentralized system, robustness in security is enhanced, and network failure minimized (eliminated) given the distributed nodes. However, these systems tend to be slower than centralized systems that have large capacities and faster transaction speeds. The report reads,

“In the case of massive transactions for retail use cases in advanced countries, it is better to adopt the centralized type. […] In the case where the amount of transaction is limited, and resilience and future possibility are prioritized, there is room to consider the decentralized type.”

Japan’s private sector is also trying its hand in the digital finance world. In June, we reported top banks in Japan including Mizuho Financial Group, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group (MUFG) joined other industry leaders to study the prospects of developing a digital payments system. The “study group” examines and solves challenges concerning digital currencies and digital settlement infrastructure.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Lujan Odera
Lujan Odera
Lujan is a blockchain technology and cryptocurrency author and editor. He has worked in the field of cryptocurrencies and blockchain technology since 2015 helping him gain enough experience to be the writer he is today. He is known for his simple writing style that allows novices to understand the field in the simplest way.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,470FansLike
2,795FollowersFollow
4,233FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Second Half of 3-Yr Bull Market: Ether’s Crazy Run has 90% of its Supply in Profit

This past weekend, the price of Ether went past $400 to as high as about $420, a level last seen in July 2018. This...

Teenage Mastermind Behind the Twitter Hack Owns $3.39 Million in Bitcoin (300 BTC); Bail Set At $725k

The 17-year old Twitter-hack mastermind holds over $3 million in BTC value with only $725,000 set for bail. In a bizarre moment last month, Twitter...

Bitcoin (BTC) Jumped to $100,000 on Binance Futures

There have been several predictions that see Bitcoin hitting a six-digit figure. On Sunday, this became a reality, very briefly, thanks to an algorithm. Bitcoin...

Flash Crash Caused Serious Network Congestion for ETH, ETC, And ERC 20 Tokens on Coinbase

On August 1, the Ethereum's blockchain faced a spike in network transaction fees, causing a backlog in transfers across several exchanges. Coinbase and Binance,...

Bitcoin’s Wild Weekend Reminiscent of 2017 Bull Rally, ‘Higher Highs Ahead in 2020'

This past weekend, bitcoin had a rough time as the largest cryptocurrency made its way past $12,000 to $12,112 in trading just after midnight...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today