CBDC Not Widely Recognised in Japan Despite Ongoing Trials, R&D Efforts: Details

As per Bank of Japan governor – money has a nature of undergoing changes which is what is happening now with the onset of digital currencies like CBDCs.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 6 March 2024 11:44 IST

CBDC Not Widely Recognised in Japan Despite Ongoing Trials, R&D Efforts: Details

Photo Credit: Unsplash/ Roméo A

CBDCs are blockchain-based digital representations of fiat currencies issued by central banks

Highlights

Japan’s CBDC is called the digital yen
It has been under development for at least two years
Japan’s CBDC could see a wide rollout by 2026

The CBDC concept in Japan, has not quite spread out to the residents there, new findings have shown. Less than 20 percent of Japan's population is familiar with the term CBDC, claimed Kazuo Ueda, the governor of the Bank of Japan (BoJ), during a recent speech. He also noted that another 20 percent Japanese residents, while having heard of something called a CBDC, did not know or understand its concept at all. Identifying this awareness-related issue, Ueda spoke at length about what CBDCs are and why they make for cost-effective alternatives for presently used cash notes.

In his speech, the BoJ governor backed the emergence of a national CBDC saying that it could facilitate faster payments of bigger denominations among noting other potential benefits. He also lauded that CBDCs need only digital wallet storages, as opposed to cash notes that require a physical storage locations.

“Retail CBDC has been explored in many countries, including Japan, on the premise that this would align with cash -- in other words, banknotes and coins -- in terms of their roles and functions as a means of payment. Cash is a direct liability of the central bank. This is in sharp contrast to existing digital payment methods,” Ueda said.

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As per the BoJ governor – money has a nature of undergoing changes which is what is happening now with the onset of digital currencies like the CBDCs.

Built on blockchain networks and issued by the central banks, CBDCs are the virtual symbol of fiat currencies. The R&D and trials around CBDCs have been heated up around several parts of the world, especially in Asia.

Japan, last July, kicked off a series of discussions with 60 companies on a pilot programme for developing a digital yen. Several large Japanese banks as well as tech majors like Sony and Toyota's Lawson were also made part of this project.

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The Japanese CBDC entered its trial phase around April last year through where the BoJ wished to analyse the technical feasibility and use-cases of the digital yen. Japan could see a wider roll out of its digital JPY by 2026.

India, China, and Hong Kong are also rapidly working towards developing and deploying their respective CBDCs.

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Further reading: Cryptocurrency, Japan, CBDC

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More