TOKYO: The Bank of Japan said Friday it will begin a feasibility study on digital currency next month, accelerating preparation for the issuance of its own virtual currency following swift moves by China and some other countries to do the same.
Although the BOJ said it “currently has no plan to issue central bank digital currency,” or CBDC, it will gear up preparation as part of its efforts to swiftly supply the virtual unit when needed, report agencies.The central bank will first test the technical feasibility of the core functions and features required for the digital currency, which is expected to be used for cashless payments via smartphones or electronic cards.
“There is a reasonable possibility for CBDC to provide a means of payments and for such systems to become global standards,” BOJ Executive Director Shinichi Uchida said Friday at the first meeting held online with participants of the experiment, including financial and fintech industry representatives.
“We believe that initiating experiments at this stage is a necessary step,” he said, adding that the BOJ is considering a pilot program involving payment service providers and end users in the near future.
The BOJ said its committee on studying digital currency feasibility involves the Japanese Bankers Association, the Japan Payment Service Association, the Fintech Association of Japan, the Finance Ministry and the Financial Services Agency, among others.
In October, central banks of the Bahamas in the Caribbean Sea and Cambodia in Southeast Asia started issuing their CBDCs, while China’s central bank has also rolled out its pilot program in some major cities.