Bank of Japan to Test CBDC in 2023

​ 

The Bank of Japan (BoJ), announced that it is collaborating with three of the country’s largest banks to launch a digital yen trial. According to Nikkei reports, Japan’s central banks has begun planning a central bank digital currency experiment (CBDC). This will include top financial institutions. According to reports, the BoJ is working with three Japanese megabanks and regional banks to launch a digital yen trial that will begin in 2023. According to the news agency, if everything goes according to plan, the central banking will issue a CBDC by 2026. The trial project will last two years and the BoJ will work with major financial institutions to help customers with withdrawals and deposits on traditional bank accounts. The pilot will test the offline functionality of the country’s possible CBDC. It will also target payments that are not made via the internet. They are digital assets, but they differ from other digital assets like Bitcoin and Ethereum. Bitcoin and other cryptocurrency are distributed in nature. The ledger of transactions is maintained by a distributed network and verified by validators. CBDCs, on the other hand, are centralised in nature and controlled by a central power like a government or central banking. Japan’s decision to pilot a CBDC program follows many other Asian countries. China was the first country to do this and allows citizens to use their digital yuan. The country has been working on its CBDC since 2014, and earlier this year launched a pilot version for its wallet application. India announced it will launch a CBDC called “the digital rupee”. The Bank of Australia recently announced that it will launch a CBDC research program, with a goal to complete it by mid-2023. This article is not intended to be used for legal, tax, investment or financial advice.