Japan Speeds up CBDC Development as China’s Digital Yuan Advances
Top Japanese bankers and officials say digital currency development is a top priority now as the country “trails behind” China and South Korea in similar projects, according to a report by Japan Today.
Japan to Move Quick With CBDC Plans
The Japanese government has placed digital currency development on an urgent status since this July, with a team of about 10 members at the Bank of Japan (BoJ) have been working towards the development of a central bank digital currency (CBDC), a digitized version of the yen.
Officials said a potential digital currency could operate on distributed ledger technology or blockchain technology, but this remains uncertain as the scalability and viable around using blockchains remains. An important consideration is that of natural disasters — the BoJ wants to see currencies operate seamlessly during such times and even power outages.
Takeshi Kimura, the BoJ’s department director-general, said the development of CBDCs is a “top priority.” He recently told a local Japanese news outlet that the bank will move forward with discussions while pushing up the level of consideration beyond the preparatory stage.
He further noted that the CBDC will replace cash and force the consolidation of other electronic payments, but declined did not provide a timeline for the rollout.
The BoJ recently appointed top economist Kazushige Kamiyama to head its payments and settlement department which oversees digital currencies. Kamiyama previously directed the use of big data in analyzing the effects of COVID-19 on the economy.
A Currency Race
As a country that relies on cash for 80 percent of transactions, the competition is stemming from a post-COVID narrative of cashless payments gaining traction over their fiat counterparts.
The report noted:
“The economic implications of the ongoing pandemic are vast, with numerous economists and analysts suggesting a slowdown in global productivity.”
As the global reserve currency, the dollar is the primary currency in which most of the world’s trade occurs. Current economic conditions have led world leaders to suggest a “Great Reset” to the global economy, it added.
The report follows an earlier post by BTCManager which noted the new Japanese digital currency team will continue the research work conducted by a previous team formed early in 2020.