With plans to conduct tests on an experimental digital yen in 2021, the Bank of Japan (BOJ) is saying the public’s input is a required component of any actual central bank digital currency (CBDC) launch.
As China continues to make significant progress with its digital currency electronic project (DCEP), other nations in the Asia Pacific (APAC) region appear to be making efforts to develop their own CBDC.
Banknotes and CBDC Will Coexist
According to Bloomberg, the BOJ will include public consultation in any CBDC-related development plans. Kazushige Kamiyama, the head of the BOJ’s payment system and the principal actor tasked with investigating the merits of a possible digital yen, made this known on Friday (October 23, 2020).
Commenting on the role of the Japanese public in CBDC consultations, Kamiyama remarked:
“At the end of the day, there’s no way we can proceed without gaining sufficient understanding from the Japanese public.”
For Kamiyama, the proposed CBDC will coexist, rather than replace the yen. According to the BOJ chieftain, the digital yen will not be utilized as a monetary policy tool. Instead, Japan’s CBDC, if issued, will focus on enhancing the country’s transaction ecosystem.
As previously reported by BTCManager, the BOJ is looking to commence CBDC trials before the end of Q2 2021. However, reports suggest that Japan’s central bank may require some legislative backing to issue a sovereign digital currency.
Multiple CBDC Trials in 2021
The BOJ executive also highlighted the need for Japan to keep pace with China’s accelerated CBDC development, adding:
“It’s not desirable if what China is doing becomes impossible to understand for us. We must diligently study.”
Indeed, China’s progress on the DCEP front has prompted several APAC nations to intensify their CBDC investigation. Apart from Japan, South Korea has also announced plans for its own experimental digital won trials in 2021. Earlier in October, the Bank of Korea announced that it was in stage two of its three-phase CBDC project.
As for China, the country is seeing numerous CBDC trials occurring across multiple cities. The Shenzhen government recently conducted a $1.5 million DCEP airdrop to 50,000 residents who received 400 digital yuan each. Despite the success of the lottery program, some recipients reportedly voiced dissatisfaction with the DCEP.
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