The Bank of Japan (BOJ) has begun experiments to study the feasibility of issuing its own digital currency.
The first phase of experiments, to be carried out until March 2022, will focus on testing the technical feasibility of issuing, distributing, and redeeming a central bank digital currency (CBDC), Reuters cited a BOJ statement.
The central banks will thereafter move to the second phase of experiments that will scrutinise more detailed functions, such as whether to set limits on the amount of CBDC each entity can hold. If necessary, the bank will launch a pilot programme that involves payment service providers and end users, BOJ Executive Director Shinichi Uchida said in March 2021.
The bank is joining efforts by other central banks that are aiming to match the innovation in the field achieved by the private sector. In recent news, The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) announced plans to unveil two prototypes of a digital dollar as early as July 2021. To learn more about CBDCs, download our ebook Central Bank Digital Currencies for Beginners – A Quick Guide into CBDCs.
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