Reuters reported in its latest article that the Bank of Japan (BOJ) has started research on the feasibility of making its own CBDC (Central bank digital currency).
BOJ follows other central banks around the world for digital money. The Bank of China (PBOC) is a leader in these activities, as it has been working on the digital yuan since 2015 and has been widely testing CBDC in China since last year. ECB chief Christine Lagarde said it could take four years or maybe a little longer to launch the digital euro.
Phase 1 of these experiments will run until March next year, according to Reuters. In this process, the focus will be on testing key functions related to the feasibility of launching, deploying and using the digital new. The Bank of Japan will move to Phase 2 to test the more detailed functions of the CBDC, as announced last October. If necessary, the central bank will then move to Stage 3, where private businesses and end users will participate in a pilot program.
The Central Bank’s chief executive Shinichi Uchida said last month that the Bank of Japan has no plans to issue a CBDC at the moment, but wants to stay prepared should the need arise in the future. “We believe starting an experiment at this stage is a necessary step,” said Uchida.
Unlike Bitcoin or other cryptocurrencies, digital currencies issued by central banks are fully government-controlled and are basically fiat currencies in digital form.