Japan is gearing up preparation for the issuance of digital currency in both public and private sectors following swift moves by China and some other countries to do the same.
Virtual money issued by central banks around the world is called “central bank digital currency” or CBDC, and is used for cashless payments via smartphones or electronic cards just as cash, while some private organizations, including one established by Facebook Inc., also plan to introduce their own digital currencies.
Different from credit cards and cashless payment services, digital currencies are expected to provide retailers commission-free payment systems while end-users are able to not only settle payments at stores but also quickly send money to others via their smartphone apps.
One of the leading central banks for a CBDC has been considered the People’s Bank of China, China’s central bank.
It has accelerated its efforts to create the “digital yuan” this year as the coronavirus pandemic hit the country, rolling out pilot programs that provided 200 digital yuan ($31) to each of 150,000 citizens selected by lottery in Shenzhen in October and Suzhou earlier this month.
“China has prompted moves toward digital currency (around the world),” said Hiromi Yamaoka, a former senior official in charge of payment and settlement systems at the Bank of Japan. “It (has done so at) surprising speed, as central banks tend to take a cautious stance” for a new system, he added.
Yamaoka said he expects the Chinese central bank to officially issue the digital yuan by 2022, when it will host the Beijing Olympic and Paralympic Winter Games.