Bank of Japan Preparing to Experiment with CBDC

Share Article
In Brief
  • The Bank of Japan is scheduled to begin experimenting with a central bank digital currency (CBDC) in Spring 2021, says Governor Haruhiko Kuroda.

  • The announcement came in the closing statement of a speech about integrating information and financial systems.

  • In October, the Bank of Japan, as well as the European Central Bank (ECB), issued reports considering CBDCs, while China’s experiment with them surpassed $160 million.

  • promo

    Claim a $200 reward with 3 simple steps — only on Bybit!

The Trust Project is an international consortium of news organizations building standards of transparency.

Bank of Japan Governor Haruhiko Kuroda said that the central bank is scheduled to begin experimenting with central bank digital currencies (CBDC).

Sponsored





Sponsored

These remarks came in the closing statements of speech Kuroda gave about integrating information and financial systems.

Central Banking as a Service

Officially, the bank has not changed its stance, Kuroda said. It “currently has no plan to issue CBDC.” Despite this, he said it was important to prepare to respond appropriately to changing circumstances. Kuroda said it was not an appropriate policy response to consider CBDCs only when the need arises in the future.

Sponsored



Sponsored

Earlier in his speech, Kuroda spoke of the proliferating concept of “as-a-Service.” Examples include “Software-as-a-Service, Mobility-as-a-Service, and Infrastructure-as-a-Service.” In each of these examples, people pay for what they need of the service without taking on the overhead costs of maintaining them.

He then highlighted “Banking-as-a-Service,” where financial services are becoming more on-demand. His words on CBDCs were in the context of keeping up with the needs of consumers.

Kuroda concluded;

“Amid significant changes that are occurring with the advent of the digital society, we will take this opportunity to carefully consider the way in which we should provide central bank money, or, using expressions from today’s theme, ‘Central Banking as a Service.’”

CBDC Plans

The Bank of Japan is not the only central bank that has been seriously considering the use of CBDCs.

In his speech, Kuroda cited a survey of 65 central banks by the Bank for International Settlements (BIS). According to the survey, 86% were exploring the benefits and drawbacks of CBDC issuance. Another 60% were conducting experiments or a Proof-of-Concept (PoC). 

Earlier, Kuroda mentioned that his institution had released a report entitled, “The Bank of Japan’s Approach to Central Bank Digital Currency” in October 2020. In the same month, the European Central Bank issued its own “Report on the Digital Euro.” 

Meanwhile, China is a step ahead of the game, having already begun trials with a CBDC. In August 2020, China’s digital currency electronic payment (DCEP) project processed over $160 million in payments from 3.13 million transactions.

As the world becomes increasingly digitized, countries that adapt to changing practices will likely gain an international advantage.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

Follow Author

$200 reward waiting for you — Deposit, Trade, Follow and Claim today!

Discover

Limited offer! Learn to mine and trade crypto today for free

Go