Japan has officially established a new committee focused on central bank digital currency (CBDC) called "Liaison and Coordination Committee on Central Bank Digital Currency".
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According to an official press release, with the committee, the Bank of Japan (BoJ) will engage in experiments on general purpose CBDC from fiscal year 2021. The regulator claims it will initially test the technical feasibility of the core functions and features required for CBDC through Proof of Concepts.
"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 says.
While the BoJ has no plans to issue CBDC, it plans to launch Phase 1 of PoC in spring 2021. Earlier this month, the bank's Governor, Haruhiko Kuroda, stressed the need for the watchdog to "prepare thoroughly" for the launch of CBDC. The BoJ has to prepare thoroughly to respond to changes in circumstances appropriately, Kuroda emphasized.
As iHodl reported earlier, Japan decided to join the race of digitization in order to compete with China's digital yuan. Hiromi Yamaoka, a former senior official in charge of payment and settlement systems at the BOJ, said that the watchdog was surprised with China's speed "as central banks tend to take a cautious stance."
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