Japan’s central bank will reportedly begin testing the use of a digital yen in April this year.
The institution has previously said that they could take Sweden as a model for how to launch a CBDC.
Catching up with China
As reported Per CNBC, the testing phase includes processing simulated transactions with private financial companies. Shinichi Uchida, chief executive of the Bank of Japan, said that consumers and retailers will be excluded from the experiment.
“Our hope is that the pilot program will lead to improved designs through discussions with private companies,” he said.
The test is intended to prepare Japan’s central bank in case the local government issues a digital version of the national currency. Uchida believes that such a financial product should be presented to the private sector before it goes live:
“Should a CBDC be issued in the future, gradually exploring its framework and engaging in highly transparent communication with the private sector are necessary steps to adopt in society.”
Source: CNBC
The central bank assured a year ago that it will cautiously approach CBDC and ensure its compatibility with the domestic monetary ecosystem. He also vowed to follow Sweden’s example and not copy China’s footsteps.
The Scandinavian country has done experiments to investigate how a digital crown will fit into your financial network and whether you can use cross-border payments.
China, on the other hand, has introduced an aggressive campaign to popularize its e-CNY. local authorities distributed million dollars of the product to the residents of several cities, including the capital Beijing, Chengdu, Shenzhen and others. They also allowed the use of digital yuan during the Winter Olympics held in Beijing last year.
Exchanges flee Japan
The Japanese government recently passed a bill that cryptocurrency issuers will no longer have to pay 30% corporate tax on their holdings. Despite the less stringent rules, some leading malls, such as kraken and Coinbase said they will exit the local ecosystem.
The former pointed to unfavorable conditions in the Japanese market and the decline of the cryptocurrency industry as main reasons.
coin base he did the same soon after, citing similar factors. Local users had until February 16 to withdraw their funds from the platform.
Binance, however, sought a permit in September of last year to re-enter the “Land of the Rising Sun”. He fortified its presence in the region in November, acquiring Sakura Exchange BitCoin (SEBC).
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