Earlier this year, Japan’s central bank announced its plans to begin testing a central bank digital currency proof-of-concept in 2021. Further details of the institution’s approach to development and collaborations have since emerged, indicating that the private sector is poised to play a prime role, at least in the testing phase. According to the Reuters report, the CEO of the Japanese financial services giant Monex welcomes the central bank’s proactive stance toward central bank digital currencies (CBDCs).
A CBDC would be positive for the digitalization of the Japanese economy.
CEO Oki Matsumoto argued that any move to introduce a CBDC would be positive for the digitalization of the Japanese economy, making it more efficient. Moreover, Matsumoto saw an advantage for the non-bank digital currency sector as well. He stated, “CBDCs will significantly enhance the interoperability of cryptocurrencies. It would make the cryptocurrency market more lively.” For CEO Matsumoto, the fact that many smaller crypto exchange brokers do not have bank accounts acts as a limit and hindrance to traders looking to convert their crypto assets into fiat money.
Japan to start experimenting with its CBDC next year.
As reported earlier, an announcement by a group of seven major central banks, including the Bank of Japan, on what they see as core features of a central bank digital currency (CBDC), such as resilience and a clear legal framework. The central bank of Japan is preparing to experiment with a national digital currency starting next year. The central bank noted that it would conduct the first phase of experiments on basic functions core to CBDCs, such as issuance and distribution, early in the fiscal year beginning in April 2021. Central banks across countries are experimenting with CBDCs.
