- Japan, which prohibits the use of foreign stablecoins such as Tether, intends to launch its central bank digital currency (CBDC) pilot program.
- The U.S. Federal Reserve has also been exploring how it can launch a fully digital dollar that some have referred to as Fedcoin.
Japan, which prohibits the use of foreign stablecoins such as Tether, intends to launch its central bank digital currency (CBDC) pilot program in April 2023. It intends to include private businesses and test a CBDC ecosystem model.
The Bank of Japan (BoJ) released the opening speech of its executive director, Shinichi Uchida, at a CBDC committee meeting on February 17. Uchida announces in it that the Bank has decided to launch a pilot program for “digital yen” in April after completing proof-of-concept testing, which began in 2021.
#Japan will start a pilot program in April to test the use of a digital yen, its central bank said on Friday, joining a growing number of countries seeking to catch up to front-runner #China in launching a central bank digital currency #CBDC.#crypto #China #BTC pic.twitter.com/ulsoGPuirb
— C-NM (@Cryptonewsmedi1) February 17, 2023
The pilot test will expand on the work on the technical feasibility of “digital yen” and model a CBDC ecosystem with the participation of private companies. According to the official, no actual retail transactions will take place during the pilot, only simulated ones.
If a CBDC were to be issued in the future, exploring its framework in such a phased manner and engaging in highly transparent communication with the private sector are necessary steps to take for adoption in society,
Uchida the next BOJ deputy governor stated.
Uchida’s speech focuses on the future CBDC’s design and the necessity of consulting the private sector on alternative data models, offline payment structures, and other crucial system components. The CBDC forum will be established for this type of consultation.
Given that the BoJ’s intentions were first published by local media in November 2022, the news of the CBDC pilot was eagerly awaited. According to the rumors, the BoJ will work with at least three Japanese megabanks and regional banks.
Japanese officials are also thinking about easing the 2022 law’s ban on international stablecoins. The revisions should be approved by June 2023, according to the Financial Services Agency of Japan. While they won’t automatically accept any foreign stablecoin into the market, they will give the go-ahead to those that pass individual inspections.
Japan and other developed nations are attempting to overtake China, which is leading the global race to create CBDCs and has accelerated the development of pilot programs for retail payments.
The American Federal Reserve has also been investigating how to introduce Fedcoin, a totally digital dollar. According to Fed officials, elected officials would need to support the launch of any such asset.