Japan central bank digital currency becoming a reality?

Japan central bank digital currency (CBDC) has not been in the news until now. The buzz in the media began when at a recent seminar Masayoshi Amamiya, the deputy governor at the Bank of Japan (BoJ) expressed that the country must be ready to launch a CBDC shall the need rises.

Amamiya furthers that the decision to introduce Japan central bank digital currency would be based on public demand for a CBDC that can happen in the wake of recent technological advancements.

Amamiya furthers that despite the fact that a CBDC may be an eventual requirement for the country, BoJ has no immediate plans to develop a CBDC, Reuters reported.

Japan central bank digital currency: A dream in making?

Amamiya explained during the event held in Tokyo that the rapid progress in technologies is pushing the financial world towards such needs, and Japan may not be an exception. However, the core mechanism, including that of “interest rates, asset prices, and bank lending,” is likely to remain unchanged, expresses Amamiya.

Amamiya’s statement is aligned with the BoJ’s larger strategy since a combined effort among the central banks of Britain, Canada, Sweden, and several other European countries is underway. The plan to exchange information on the possibility of CBDC in their respective countries was announced just last week.

What is a central bank digital currency?

Central bank digital currencies or CBDC, in short, is the digital version of a country’s fiat money – Yen in case of Japan – where the digital version possesses all the properties of its paper-based counterpart.

However, a CBDC allows the trading of the central bank currency on cryptocurrency and digital currency exchanges such as Binance and Bitfinex. CBDCs are believed to improve cross border payments in the quickly changing scenario of the digital payment systems.

Featured Image by Wikipedia