The Bank of Japan, the country's central bank, has reported it plans to start testing its own central bank digital currency (CBDC).
According to a recently published report by the institution entitled "Technical Hurdles for CBDC," the bank wants to digitize cash, but it still must check whether Japan is able to catch up with China, which has been developing its digital yuan for quite some time.
This is the first time the institution talks about its plans to launch its own digital central bank currency. At the moment it has not shared any calendar.
According to the document, the Bank of Japan wants to "check the feasibility of CBDC from technical perspectives, collaborate with other central banks and relevant institutions, and consider introducing a CBDC."
Japan has decided to start its own research in this area due to the fact that many other countries are conducting their own studies aimed at launching a central bank currency. Thus, in February it was known the central banks of Britain, the Eurozone, Japan, Canada, Sweden and Switzerland had announced a plan to collaborate on the research of CBDCs.
The Bank of Japan thinks the launch of a digital yen would face two main obstacles: universal access and resilience. The former refers to providing accessibility to everyone, while the later refers to offline availability when power is unavailable.
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