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A report by the Bank of Japan indicates that to be prepared in case of the great need for a CBDC, the bank will launch a feasibility study.
Japan is set to launch a study into the feasibility of a digital currency (CBDC) for use in both the private and public sector similar to Facebook‘s Diem. This move emulates China and a few other countries who have done the same recently.
Digital currency, issued by central banks and called Central Bank Digital Currency enables users to make cashless payments. CBDC payments can be made using smartphones and electronic cards.
They make payments and sending money quickly and easily. An advantage over other payment methods is that payments are commission-free for retailers.
The Bahamas Central Bank on 20 October announced a CBDC linked to the Bahamian Dollar. The currency is called “Sand Dollar”. The National Bank of Cambodia followed suit by announcing the Bakong CBDC on the 28 of the same month. The People’s Bank of China initiated a pilot program for the digital Yuan.
The Japan Times reports that in the program, 150,000 citizens selected by lottery will receive 200 digital yuan.
Former Bank of Japan official Hiromi Yamaoka notes that China has ‘prompted moves towards digital currency around the world at surprising speed, as central banks tend to take a cautious stance for a new system’.
Yamaoka believes that the digital yuan will be rolled out in time for the Beijing Olympic and Paralympic Winter Games.
Another former Bank of Japan official Masashi Nakajima, a professor at Reitaku University comments:
“We are seeing a once-in-a-millennium change in the history of currencies after the long-time use of currency notes following the world’s first introduction in China about 1,000 years ago.”
Central Banks around the world are teaming up to investigate the “potential promotion of innovative payments”. This is according to a joint report released in October by several financial giants like the Bank of Japan the United States Federal Reserve, the European Central Bank and the Bank for International Settlements.
Yamaoka, who is chairing the ” Digital Currency Forum” has a vision for a digital currency steered by the private sector. The forum has commenced a study with 30 major firms including Japan’s MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank.
A report by the Bank of Japan indicates that to be prepared in case of great need for a CBDC, the bank will launch a feasibility study. The study is set to begin in April 2021.