Japan to Launch Advisory Panel to Explore its CBDC Development

Japan is mulling the idea of inaugurating a government advisory panel of experts in connection to issuing its Central Bank Digital Currency (CDBC), the digital yen. This panel will explore and decide on the advantage and feasibility of putting out a digital yen. Based on the efforts being made by Japan Finance Minister Shunichi Suzuki, the panel of experts is likely to be launched in April.

Notably, the pilot testing phase will commence before the government advisory panel is organized. The Bank of Japan (BoJ) has already announced plans to commence pilot testing in April. During this time, selected participants will be made to imitate real transactions with the digital currency as a way of analyzing the potential use cases of the CBDC.

Also, this will be the phase where the digital yen’s integration with other existing financial networks and infrastructure will be assessed to enable offline transactions.

The government of Japan had already pledged to commence its CBDC feasibility testing in 2023 as far back as 2021 under a medium-term policy platform. A source familiar with the subject of creating an advisory panel confirmed that “It will be in line with the pledge made in the policy platform.”

Bank of Japan Concentrate on CBDC Pilot Phase

Meanwhile, the apex bank is making an intense effort to prepare for the pilot testing phase in response to a call to action by Haruhiko Kuroda the governor of BoJ.

Kuroda emphasized the need to design the CBDC in a way that it can function like other forms of money, hence taking away the security struggles that may show up when trying to use the digital yen as a payment option.

“Ensuring the coexistence of CBDC with various other forms of money … is something that we need to and will in fact achieve in the future,” also, “There are various options lying before us in terms of how and when to carry this out. But it’s our duty as a central bank to prepare ourselves to respond flexibly to any change in circumstances.” the BoJ Governor Kuroda said In his speech ata financial technology seminar.

So far, Japan has not failed to remind the public that it has not taken a final stance on whether to implement a CBDC or not. In the meantime, the Asian country is only exploring and researching the feasibility of using a national digital currency.