• Japan is set to launch a pilot program in April to test the use of its version of a central bank digital currency (CBDC) known as the digital yen.
• The move comes after more than two years of proof-of-concept experiments by the BoJ around the digital yen, even as China’s digital yuan continues to lead the CBDC race globally.
• The move also comes at a time when the BoJ is set for leadership transition, with Kazuo Ueda expected to take over the top job from Haruhiko Kuroda when his second five-year term ends in April.
Japan Launching Pilot Program for Digital Yen
Japan will launch a pilot program in April to test the use of its version of a central bank digital currency (CBDC) known as the digital yen, according to Bank of Japan (BoJ) Executive Director Shinichi Uchida. This follows more than two years of proof-of-concept experiments by the BoJ and signals leadership transition in April when Kazuo Ueda takes over from Haruhiko Kuroda.
Objective of Pilot Program
The objective of this pilot program is twofold: first, it will test technical feasibility; second, it will make use of private businesses’ technology and operation skills for designing an ecosystem should social implementation become necessary.
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China’s Digital Yuan Leading Way Globally
China’s digital yuan continues to lead global CBDC race, now extended over 105 countries representing 95% global GDP, while various nations are still experimenting or developing their own CBDC initiatives such as India and United States respectively.
Leadership Transition at BoJ
Kazuo Ueda is expected to take over top job at BoJ from Haruhiko Kuroda when his second five year term ends April which could spark further development towards issuance and usage model for Japanese CBDC initiative.