Japan is accelerating its efforts to explore the potential of the overall blockchain sector. Moving forward on its CBDC plans, the Bank of Japan (BoJ) is looking to rope-in a bunch of other mega banks to test the digital yen. The three Japanese megabanks, while unnamed officially, are reportedly supposed to be Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc., and Mizuho Financial Group Inc. Starting next year, these banks will help the BoJ verify if there are any issues with the deposits and withdrawals of the CBDC.
Japan could see a wider roll out of its digital yen by 2026. Prior to that, the BoJ aims to check if the CBDC works efficiently under disaster-lie situation or no Internet connectivity, said a Nikkei report. This trial with the Japanese mega banks could go on for as long as two years.
A CBDC or a central bank digital currency is built on blockchain, works like cryptocurrencies, but are issued and regulated by the central bank.
CBDCs are being designed by several nations around the world, with the aim of complementing, rather than replacing, current forms of money and provide an additional payment avenue to users.
As part of its research on CBDC, Japan’s main aim is to ensure that it aligns properly with the country’s existing financial and economic infrastructure. As per Kazushige Kamiyama, the head of BOJ’s payments department has revealed that Japan’s CBDC will soon enter a small-scale pilot test.
Japan’s prime minister, Fumio Kashida has been on a hunt to find ‘new capitalism’ solutions to boost the country’s economy. The lawmakers of the country are not shying away from trying out crypto services to eradicate financial inequality in the country.
Back in May, Kishida had said that Japan would develop and foster a promotional environment for Web3, blockchain, NFTs, and the metaverse.
Meanwhile, India, Russia, Jamaica, and China are working on their respective CBDCs.