The Bank of Japan has revealed its plans to launch a pilot programme to test the use of the digital yen after two years of experiments in April 2023.
According to Bank of Japan representatives cited by cnbc.com, the primary aim of the pilot programme is to come up with improved designs following discussions with private businesses. They also revealed that the BOJ will conduct simulated transactions with private financial institutions in a test environment. However, it’s worth noting that they don’t plan to conduct actual transactions among retailers and consumers.
BOJ officials expressed that it’s important to explore the framework of a potential digital yen in a phased manner while engaging in highly transparent communication with the private sector. At the time of writing, China is currently leading in the global race to introduce a CBDC, as it has already put forward pilot schemes for retail payments.
According to cnbc.com, the US Federal Reserve has also been looking into launching a digital dollar that some have referred to as Fedcoin. However, Fed leaders have expressed that launching such an asset would only be possible with the support of elected leaders.
Coinbase has decided to end its operations in Japan
While the Japanese Central Bank is looking into issuing a central bank digital currency, cryptocurrency exchange Coinbase has decided to shut down its operations in Japan due to volatile market conditions and a low demand for digital assets.
According to Reuters, the cryptocurrency exchange revealed its plans to leave Japan on 18 January 2023, which was just a few days after it announced a series of layoffs due to low demand for digital assets. According to Oppenheimer analysts cited by the same source, the company has been keeping a close eye on the Japanese crypto market for some time but obtained its license from the Japanese regulator around a year and a half ago.
When it launched in Japan in August 2021, Coinbase aimed to become fully compliant with local regulations and to become a trusted exchange among Japanese customers. Back then, company representatives also announced a partnership with Mitsubishi UFJ Financial Group (MUFG) in an effort to help people in Japan access the platform quickly and begin trading on the exchange by offering MUFG Quick Deposit for all customers in Japan from day one.
