TOKYO (Reuters) – The Bank of Japan said on Friday it would begin experimenting next year on how to operate its own digital currency, joining efforts by other central banks to catch up to rapid private-sector innovation.
The move came in tandem with an announcement by a group of seven major central banks, including the BOJ, on what they see as core features of a central bank digital currency (CBDC) such as resilience and a clear legal framework.
It also falls in line with new Japanese Prime Minister Yoshihide Suga’s focus on promoting digitalisation and administrative reform to boost the country’s competitiveness.
In a report laying out its approach on CBDC, the BOJ said it will conduct a first phase of experiments on basic functions core to CBDCs, such as issuance and distribution, early in the fiscal year beginning in April 2021.
The experiments will be part of the BOJ’s efforts to look more closely into how it can issue general-purpose CBDCs, intended to be used widely among the general public including companies and households.