The Bank of Japan began testing its own Digital Currency (CBDC)
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The Bank of Japan began testing its own digital currency
The regulator will test the main functions of CBDC as a payment instrument until March 2022.
The Bank of Japan has begun the first phase of testing its own digital currency (CBDC), which will last until March 2022. As part of this phase, the regulator will test the main functions of the CBDC as a payment instrument. In total, three stages of testing the national digital currency are planned. The second phase is aimed at a more detailed study of CBDC, and during the third phase, private enterprises and ordinary users will have access to digital currency.
In March this year, the executive director of the Bank of Japan, Shinichi Uchida, said that the regulator does not plan to issue CBDC yet, but wants to be ready for it in the future.
“We believe that starting an experiment at this stage is a necessary step. Considering current factors, including technological developments at home and abroad, CBDC has the opportunity to become a tool for payments and settlements, and such systems will become world standards,” – Uchida said.
CBDC development in China
The Bank of China is the closest to issuing its own national digital currency. The regulator began testing CDBC back in November last year. The tests are taking place in the cities of Shenzhen, Suzhou, Chengdu, and in the new state-level Xiong’an district, Hebei province. The authorities are planning to use the national digital currency during the Winter Olympics to be held in Beijing in 2022.
The introduction of national digital currencies will reduce the demand for bitcoin and other decentralized cryptocurrencies, said the head of the Bank of Korea Lee Ju-yeol. He believes that the main digital coin and altcoins are limited in terms of their ability to function as a means of payment.
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