The Bank of Japan (BoJ), the country’s central bank, will conduct experiments with three megabanks and regional banks on a digital yen, according to a report by Nikkei on Wednesday. 

See related article: Indonesia’s wholesale CBDC to be ready for bank use by year end: report

Fast facts

  • BoJ will collaborate with private banks and other institutions from the spring of 2023, to study any problems with withdrawals and deposits in bank accounts, the report said. 
  • The central bank would also study if its central bank digital currency (CBDC) can work in a natural disaster and even in locations without internet. 
  • BoJ intends to conduct the experiment for about two years before deciding on whether to issue a digital yen in 2026, according to the report. 
  • Japan’s central bank began experiments in April last year to test the technical feasibility of a CBDC.
  • Several central banks across the globe are experimenting with CBDCs, a form of digital money that represents a direct claim on the central bank. Singapore’s central bank recently partnered the New York Fed to explore wholesale CBDCs, while India’s central bank has started a pilot run of wholesale CBDCs with nine banks.
  • See related article: Digital dollar takes another step in White House’s “first ever” digital assets framework

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