Japan assessed possible prospects for the Central Bank to issue digital yen by the end of 2022.
The Asian continent has recently been rich in developments related to Bitcoin, mining and other digital currencies. One of these countries is Japan, one of the most technologically advanced countries in the world. Recent cryptocurrency developments have also affected the country’s financial sector.
Japan’s economy is already undergoing major changes as retailers offer different non-banking online payment methods. This poses a risk to commercial banks. A parallel issue is the implementation of the CBDC. For example, Hideki Murai, from the digital currency group of the ruling Liberal Democratic Party, told Reuters in an interview that the government will have a clearer idea of what a CBDC will look like in Japan by the end of next year.
Murai also noted that the situation could lead to a war between traditional lenders and operators of online payment platforms. He also said that no immediate decision will be made to issue a CBDC due to the uncertainty of its structure and its impact on financial institutions. He also touched on issues related to the Bank of Japan.
It is known that the Bank of Japan started the first phase of experimentation with the digital currency central bank (CBDC) in April this year, and the second is in preparation for next year.
The question, according to Murai, is whether the digital yen will interfere with the private sector. The Bank of Japan’s CBDC issuance will have a strong impact on Japan’s financial system. Murai added that the Bank of Japan must ensure the compatibility of the digital yen with other developed countries’ CBDCs to counter China’s rapid progress in issuing digital yuan.