The so-called Digital Yen – Japan’s upcoming digital currency – is now the “top priority” of the country as it battles the economic implications of the ongoing coronavirus pandemic and seeks to revitalize growth.
Digital Currencies a Major Focus
Takeshi Kimura, departmental director-general of the Bank of Japan (BoJ), told local news outlet The Asahi Shimbun that issuance and development of the digital yen is a “chief concern” for the central bank.
Senior Japanese lawmakers have been calling on the government to step up research since February, noted CoinDesk.
The country has stepped up research in a central bank digital currency (CBDC) this year as neighbors China and South Korea are moving ahead with their efforts. The former is already testing its digital Yuan across several applications, government centers, and retail stores, while the latter is conducting research and aims to launch a pilot early next year.
Last month, as BTCManager reported, the BoJ said it will soon launch proof-of-concept tests for its CBDC. As stated in a fresh report entitled “Technical Hurdles for CBDC,” the BoJ made said it plans to carry out a comprehensive feasibility study of the digital yen from a technical standpoint, besides working with other apex banks and financial institutions before issuance.
In the bank’s view, the “ideal” CBDC must provide financial inclusivity to citizens regardless of their location or economic statute; the latter meaning availability to those who don’t own smartphones. In addition, it must operate seamlessly during times of natural disasters such as Tsunamis and earthquakes (the country is infamous for both of those).
China’s CBDC Lead a Concern
The BoJ has been experimenting with a CBDC but has so far said there are no plans to launch one. However, the government did state earlier this month that launching a digital yen would be considered “as part of this year’s legislative agenda.”
A proposal from the ruling Liberal Democratic Party in June said China’s global lead in CBDC development could become a national security threat, notes CoinDesk.
China’s lead in digital currencies is astonishing, even as it continues to shun Bitcoin and other cryptocurrencies.
However, with countries like Japan and the Philippines amping up their efforts; China’s lead will soon see competition.