The Bank of Japan plans to use three large banks in its upcoming virtual yen experiment
The Bank of Japan (BOJ) plans to decide in 2026 whether or not to introduce virtual currency.
Japan is unsure when to adopt a blockchain and virtual currency, so the apex bank is still testing a potential virtual Yen (CBDC). This is an effort to diversify the portfolio of the BOJ.
The Japanese monetary authority has started cooperating with three significant financial institutions and finance companies to carry out a CBDC distribution trial, according to a Nov. 23 article by the national media outlet Nikkei.
The monetary authority has reportedly started planning an initiative with Japan's major financial institutions and investment firms to issue a blockchain and smart money, according to Nikkei.
Within that summer, the virtual Yen experiment would begin. After examining bank account contributions and withdrawals for two years to see if there have been any problems, the central financial institution will decide on a CBDC in 2026.
The prototype program will act as a platform for trial runs when the virtual Yen, Japan's national virtual currency, is first issued in the summer of 2023.
As part of the proceedings, the BoJ is expected to collaborate with critical financial institutions and other parties to identify and resolve any issues pertaining to consumer cash transactions from financial institutions.
The trial would assess Japan's potential CBDC's unencrypted capability, focusing on transactions outside the network, the source claimed.
The publication claims that Japan's monetary authority will continue its CBDC trial for about two years before deciding whether to introduce virtual currency by 2026.
The announcement came as governments around the globe intensified their initiatives to look into and promote CBDC, with China leading the way in this area.
As reported in the media on November 22, the Bank of India (RBI) is preparing to introduce a consumer prototype of the electronic Rupee in December in collaboration with important regional financial institutions, including the State Bank of India.
The FRBN's Technology Group confirmed the start of a 12-week cryptographic CBDC prototype in the middle of November, along with industry heavyweights like BNYM, HSBC, and others.
While much of the world has already been racing to implement a CBDC, other countries, notably Denmark, have recently distanced themselves from the competition.
The regulators cited several reasons for ceasing their CBDC or CBDC-related operations, including potential difficulties for the government industry, questionable benefits, and several other issues. But no monetary authority has completely ruled out the idea of creating a CBDC.
Disclaimer: Nothing on this site should be construed as a financial investment recommendation. It’s important to understand that investing is a high-risk activity. Investments expose money to potential loss.