Japan’s central bank started testing of a new digital currency in an effort to experiment with how it can be used, the Bank of Japan announced in Monday. The announcement came after the Chinese government revealed that it was doing something very similar with a digital yuan in March beggining.
“The Bank of Japan is preparing to begin experiments with the Central Bank’s Digital Currency (CBDC) at the beginning of fiscal year 2021, to test the technical feasibility of the essential functions and resources needed by CBDC,” said the Bank of Japan. Japan in a statement Published connected. “As the necessary preparations are complete, Phase 1 of the Proof of Concept (PoC) begins today.”
The announcement confirms rumors that have been running since the end of 2020 about the potential creation of a digital yen in Japan. But there is no guarantee that Japan will ever make the digital currency available to the public. Everything is very experimental now, according to the Bank of Japan.
“In Phase 1 of the PoC, the Bank plans to develop a test environment for the CBDC system and conduct experiments on the basic functions that are essential for CBDC as a payment instrument, such as issuance, distribution and redemption,” continued the statement from the Bank of Japan. “This phase will be carried out until March 2022, for a period of one year.”
While the Record points out, virtually all the major central banks in the world are making experiments or rumors that they are experimenting with digital currencies to ensure they are ready whenever the time comes to issue them. And as cryptocurrencies like bitcoin and ether become more popular through services like PayPal, that time may be sooner or later.
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In the USA, Treasury Secretary Janet Yellen said she supports research funding in a digital dollar, although it signaled the kind of conservative thinking you’d expect from a senior government official. At least the type of thinking in a normal (read: post-Trump) government.
“There’s a lot to consider here, but it’s worth looking at,” said Yellen in February.