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After the announcement of the Bank of Japan to introduce digital Yen by 2021, the statement by Kozo Yamamoto recorded that introducing digital currency in Japan is essential.
Central Banks of all the states have been working on the pros and cons list of introducing digital currency. However, the debates during the lockdown when the private sector’s emerging alternatives such as Facebook’s Libra project and China’s digital yuan introduction.
Last week, seven central banks including Bank of Japan, responded and issued a report regarding the key requirements for the creation of CBDC. Despite China’s efforts to be the first to introduce a digital currency, Japan has stepped forward with a three-step plan for its digital currency.
In the first phase, it is planning to develop the test environment for CBDC system and experiment the basic functions like issuance and redemption.
— Finextra (@Finextra) October 15, 2020
The second phase will focus on the implementation of more functions in the test environment along with some technical experiments on certain functions required for CBDC. During the third phase, it will consider piloting involving PSPs and end-users if the Bank finds it necessary.