Bank of Japan Explores Possibility of Digital Yen
In a bid to explore the potential of a digital yen, the Bank of Japan (BOJ) has initiated discussions with 60 companies, marking a significant step in the realm of central bank digital currencies (CBDCs).
Reported by Reuters on July 20, this move aligns with the increasing global trend among central banks to delve into the development of digital versions of their currencies for retail use.
The BOJ's discussions with the selected companies will cover a wide array of topics, ranging from the technical aspects to the business aspects of conducting retail settlements using a CBDC.
While the BOJ is actively exploring the concept, it is vital to note that no final decision has been made regarding the issuance of a digital yen.
Ultimately, this decision rests with Japan's government and parliament, who will need to thoroughly assess the potential benefits and implications of such a currency.
Nonetheless, the participation of numerous prominent Japanese companies, including Sony, Lawson, Toyota's financial division, and East Japan Railway, among others, in these discussions signals Japan's significant progress toward a potential digital yen launch.
The global interest in CBDCs emerges from central banks' desire to maintain relevance in an ever-evolving financial landscape, where digital payments are gaining popularity and cash usage is waning.
Developing their own digital currencies allows central banks to ensure that digital payment systems are not exclusively controlled by private sector entities.
A recent Bank for International Settlements (BIS) survey suggests that around two dozen central banks, both from emerging and advanced economies, are likely to have their digital currencies in circulation by the end of this decade.