Posted 8 months ago | by @devadmin
Over thirty different Japanese firms will be piloting a digital yen next year testing the use of a Central Bank Digital Currency (CBDC.)
Thirty firms from including telecoms, utilities, and retail will participate in the 2021 trial run of the digital yen. This also includes Japan’s three largest banks, Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group, Reuters reported.
The move accompanies the Bank of Japan’s recently announced plan to experiment with issuing a digital yen in July of this year, as Japan plays catch up to China.
“Japan has many digital platforms, none of which are big enough to beat cash payments,” Hiromi Yamaoka, a former BOJ executive who chairs the group, said.
Japan’s private banks will be responsible for issuing the currency, however, the possibility of other players being involved in issuance has not been ruled out, according to Yamaoka.
Earlier this week, Yamaoka recognized the difficulties that would come with issuing a digital yen; both for the Bank of Japan and private financial institutions, noting that it could take years, Cointelegraph reported.
“The fundamental question, and a very tricky one, is how to ensure private deposits and a CBDC [central bank digital currency] co-exist. You don’t want money rushing out of private deposits. On the other hand, there’s no point issuing a CBDC if it isn’t used widely.”
Japan’s leading banks, Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group have all developed their own individual digital payment systems before, including digital assets.
The idea of the design, however, is to avoid a “silo-type” platform with a fragmented digital payments structure. Yamaoka said:
“Japan has many digital platforms, none of which are big enough to beat cash payments. […] What we want to do is to create a framework that can make various platforms mutually compatible.”
Asia Times has previously reported that a digital yen could reverse Japan’s deflation, assert control, and aiding confidence in the countries fiat currency. The (BOJ) Bank Of Japan has hoarded more than half of all government bonds. It has cornered the stock market via exchange-traded funds and has expanded its balance sheet to exceed the nation’s entire $5 trillion economy.
Bitcoin is currently trading at [FIAT: $18,701.50 ] UP +0.6% in the last 24 hours according to Coingecko at the time of this report.