The Bank of Japan has made an enormous step forwards in the global adoption of digital assets after it was revealed that it started experimenting with a Central Bank Digital Currency (CBDC) in the form of a digital Japanese Yen (JPY).
According to a report by the BoJ, dubbed Technical Hurdles for CBDC, the experiment is to “check the feasibility of CBDC from technical perspectives” while collaborating “with other central banks and relevant institutions, and consider introducing a CBDC”.
This move the BoJ will come as a surprise to many after its governor appeared to comment on a “lack of demand” for CBDCs back in December.
At the time, BoJ governor Haruhiko Kuroda said: “It does not seem that there is a demand for a CBDC from the public at present. Nevertheless, the Bank of Japan has been conducting technical and legal research on this matter in order to stand ready when the need for a CBDC may arise in the future.”
Brilliant!!! China is introducing a regional, blockchain-based, digital currency that will be backed by Chinese Yuan, Japanese Yen, and Korean Won!
Strategic move that also reflects China's philosophy of harmony (NOT hegemonic like US dollar).https://t.co/U3xBBFPBIo
— CaliCali2000 (@CaliCali2000) June 14, 2020
In November of last year the European Central Bank announced that it was piloting a testing program along with various central banks across the world on the potential implementation of CBDCs.
The Central Bank of France then followed up in April with confirmation that it was testing a digital Euro, with it stating at the time: “The aim is to explore the potentialities offered by this technology, and to identify concrete cases integrating Central Bank Digital Currencies in innovative procedures for the clearing and settlement of tokenised financial assets.”
While government and central bank-issued digital currencies still seem relatively far away in terms of daily use among the public, the fact that testing is well underway bodes well for the technology that has been criticised heavily over the past decade.
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