Japan is another popular Asian country that is pushing through the launch of a central bank digital currency (CBDC). Reportedly, the Central Bank of Japan (BoJ) is exploring ways to initiate offline usability of Japan CBDC, due to some challenges facing the country.
BoJ wants Japan CBDC available offline
In the bank’s latest research report, it mentioned that challenges like power outages, including earthquakes, ought to be considered before the actual launch of Japan CBDC. The existence of these challenges means it is necessary to ensure the offline usability of Japan CBDC, given that the central bank intends to cater to universal access and resilience.
Although Japan is globally seen as a technologically advanced nation, smartphone penetration in the country accounts for only 65 percent, per the report. Additionally, the bank intends to explore offline usability of the Japan CBDC given that physical payment with cash is still prevalent in the country. Digital payments reportedly account for 20 percent.
Japan wants a generally accessible CBDC
Thus, making the Japanese CBDC available for offline payments will encourage adoption. To achieve this, the central bank is exploring several methods, one of which includes a SIM card chip. However, using this particular method might not ensure user-friendly, although non-smartphone users can be able to use the CBDC through this method.
The central bank mentioned other alternatives, including making a debit card for the Japan CBDC; however, each of these methods has a challenge accompanied by it. Part of the problems had to do with security and Anti-money laundering concerns.
Besides the offline availability of Japanese CBDC, the bank discussed other areas of digital currency development, including if they will use a decentralized or centralized blockchain for the CBDC.