China and Japan, Asia’s two largest economies, are on full steam ahead with their respective Central Bank Digital Currencies (CBCD) trials. China, with their six Chinese banks offering digital wallets and Japan establishing a new committee called Liaison and coordination committee.
Japanese in the Initial Phase of Developing Central Bank Digital Currency
The statement from the bank reads,
“The Bank, through this committee, will share details of, and provide updates on the PoC with the private sector and the government and will seek consultation on future steps to facilitate smooth implementation of the PoC.”
The announcement also takes note that the bank has been preparing to conduct a pilot CBDC since October 2020. And will formally commence Phase 1 of its CBDC pilot next month.
China Piloting its CBDC Trails
Coming to the Chinese CBDC, three days ago, On March 23, the Chinese state media outlet Sina reported that six major government-owned banks have begun testing wallet services for the digital renminbi.
Customers who are facilitated can apply for the banks’ whitelists to participate in the trial, and if approved, will be issued sub-wallets connected to the central bank’s digital RMB application.
The central bank will review applications on a case-by-case basis. On approval of the applications, a text message containing instructions on downloading and setting up the digital wallets by scanning a QR code will be sent.
Sub-wallets are initially set with a payment limit of 1,000 yuan daily. Users can later apply to raise the limit if needed. Wallets can optionally be linked to existing bank cards issued by the participating institutions.
It is observed that China has been piloting its CBDC in the metropolitan centers of Beijing, Shenzhen, Suzhou, and Chengdu since October. The six banks participating are namely the Agricultural Bank of China, China Construction Bank, Postal Savings Bank of China, Bank of China, Bank of Communications, and The Industrial and Commercial Bank of China.