- The Bank of Japan has unveiled plans to zero in on the possible development and issuance of their own Central Bank Digital Currency (CBDC).
- This has most likely been triggered by China’s efforts to developing its digital Yuan.
News has surfaced that the Japanese Central Bank will now focus their efforts on the development of the digital Yen. This is a there is growing concern that China might beat them by issuing the CBDC first.
Takeshi Kimura, departmental Director General at the BOJ, has reiterated that the Central Bank is still in talks about increasing their scope to past the preliminary phase. This was during his Q&A with a local Japanese news outlet. He indicated the probability of collaborating with the private sector, which may be knowledgeable about such projects. He was, however, not keen to put a timeline on the test runs.
According to Kimura, the digital Yen must constitute of two major attributes: Universal access and be resilient. The digital Yen must be accessible to everyone as it is with the local fiat currency. It must also be resilient and be available at all times, even in the face of calamities that may lead to power outages. He remarked that the reduction in the circulation of the digital yen would mark the consolidation of the digital currency era, further necessitating the urgency for a CBDC.
Notably, China’s push for the CBDC may have rattled other jurisdictions leading to a sudden need for their own CBDC’s. Various Central Banks such as Bank of Thailand have announced test-runs for their CBDC, the digital Baht. This June, an LDP policy committee put forward a dossier labeling China’s head start in the CBDC race as a threat to National security.
China’s own need for the digital Yuan may have been sparked off by the announcement of the ambitious Libra project. Although there is no launch date for the digital Yuan, they have made inroads into the project. Recently the former PBOC Vice-Chair, Wang Zhongmin, declared that they had already completed the backend infrastructure for the digital Yuan, which is an impressive feat in any CBDC initiative.