Bank of Japan Gearing Up For Issuing Digital Currency

Tarulika  |  Jul 29, 2020

Takeshi Kimura, the department director-general in Bank of Japan, advocated that Central Bank Digital Currency (CBDC) will be given the utmost priority in the bank. He clarified that the launch of digital currency will be considered beyond the preparation stage soon. He did not mention the timeline for testing but optimistically told about the cooperation with the private sector for enhancing the technical knowledge of digital currencies.

Bank Of Japan Aiming To Resolve Issues

Bank of Japan has geared up testing digital currency before issuing them to the citizens of Japan to use as the alternative medium of exchange. After the team of 10 members within the Payment and Settlement Systems Department of the central bank was constituted to seek the solutions related to issues of digital currency, Kimura mentioned the key features mandatory in CBDC.

As per the central bank, two key issues are:

  • Universal accessibility of CBDC like that of fiat currency
  • Resilience or the ease of use of digital currency during an emergency including the temporary cut off of electric power.
  • The bank is working hard to resolve both the issues related to digital currency

    Kimura explained that the bank might be ready to launch the CBDC when the circulation of fiat currency, Yen, will decline in circulation as that might be the signal for the need of CBDC. He added that one of the aims of Bank of Japan to launch digital currency would be to strengthen the various cashless payments systems and increase the compatibility among them.

    Dis-balance In The World To Adopt CBDC

    China was preparing for years to have first-hand experience in launching its own digital currency or, specifically, CBDC  which might face some national security threat while testing, as per the proposal released by the committee of LDP policy in early June. According to some countries, China is desperate to launch the digital Yuan to overpower the global dominance of the leading currency, dollar.

    Not only the Bank of Japan and Central Bank of China, but 80 per cent of 66 central banks of the world are working in the direction to issue their digital currency, as per the reports of Bank for International Settlements.

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