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Bank of Japan to try digital only with three megabanks

by SuperiorInvest

Despite Japan’s uncertainty over whether to issue a central bank digital currency (CBDC)The Bank of Japan (BoJ) continues to experiment with a potential digital yen.

Japan’s central bank has begun cooperation with three megabanks and regional banks to carry out a CBDC pilot project, local news agency Nikkei reported on November 23

The pilot project aims to provide demo experiments for issuing Japan’s national digital currency, the digital yen, starting in spring 2023.

As part of the trial, the BoJ is expected to work with large private banks and other organizations to detect and resolve any problems related to customer deposits and withdrawals from bank accounts. According to the report, he will be a pilot include offline functionality testing possible Japanese CBDC with a focus on internetless payments.

The Bank of Japan plans to continue its CBDC experiment for about two years and decide whether to issue the digital currency by 2026, the report said.

The news comes amid countries around the world increasingly launching CBDC research and development initiatives, including countries like China is leading the global CBDC race.

As Cointelegraph reported on November 22, the Reserve Bank of India is preparing to launch a digital rupee retail pilot in collaboration with major local banks including State Bank of India in December. In mid-November, the Federal Reserve Bank of New York’s Innovation Center announced the launch of a 12-week CBDC trial pilot project in cooperation with banking giants such as BNY Mellon, Citi, HSBC and others.

Related: Japan’s international payment system will test plastic cards for CBDC

While most of the world has rushed to launch CBDCs, some countries like Denmark have dropped out of the digital currency race. Central banks have cited potential difficulties for the private sector, questionable value and benefits, and other issues as reasons for abandoning their CBDC or CBDC-related projects. Still, no central bank has ruled out the possibility of a full CBDC launch.

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