Japan is getting ready to unveil its digital currency on both the public and private sectors. Japan’s moves follow in the footsteps of China and other jurisdictions that have made similar moves in the recent past.
The Chinese have been quite the case study recently with the “Digital Yuan” being the subject of a lot of study and speculation. The People’s Bank of China has also received lots of attention being the expected issuer of the digital Yuan. The bank has recently accelerated efforts to create the digital currency with pilot tests having been done already. The bank wants all preparatory exercises complete as soon as possible with the ambition being to roll out the currency in these pandemic times.
Digital Yuan by 2022?
The Chinese are preparing not only at home but abroad as well according to former Bank of Japan senior executive, Hiromi Yamaoka. Yamaoka went on to praise the pace at which China had moved saying;
“China has prompted moves toward digital currency (around the world). It has done so at surprising speed, as central banks tend to take a cautious stance” for a new system.
Yamaoka went to add that he expects the digital Yuan to be ready by 2022 in time with the Beijing Olympic and Paralympic Winter Games. Japan also has other examples of countries that have launched their digital currencies. Some of the examples include Cambodia and the island state of Bahamas.
“We are seeing a once-in-a-millennium change in the history of currencies after the long-time use of currency notes following the world’s first introduction in China about 1,000 years ago,” said Masashi Nakajima, a professor at Reitaku University and a former BOJ official.
Central Banks in digital currency feasibility studies
Nakajima added that technological advancements including Blockchain that counter cyber-attacks and counterfeiting have led to the rise of digital currencies. The Bank of Japan as well as several other major central banks are looking to pursue innovative payments through a joint effort. The BOJ is getting ready to launch its feasibility study on digital currencies next year according to a released report. The report said in part;
“The bank considers it important to prepare thoroughly to respond to changes in circumstances in an appropriate manner,”
Former BOJ senior executive Hiromi Yamaoka is also looking to do a feasibility study on digital currencies through his forum. Yamaoka and his group aim to bridge the various existing cashless payment services and boosting interoperability by offering their “common” digital currency. He stressed the need for Japan to accelerate its moves towards digital currencies stating that;
“Japan would lag behind other countries if we take a wait-and-see stance until the rollout of the BOJ’s CBDC,”
A successful digital currency rollout would see retailers benefit from free payment systems. End users will also benefit from having the ability to easily issue payments at stores and send money to others via their smart-phones.
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