Japan’s central bank, Bank of Japan (BoJ), is setting up a new research team to look into the implications of Central Bank Digital Currency (CBDC), Reuters reported on 20 July.
According to the publication, the new group was created due to the increase in demand for cashless payments, and the recent rise in interest from other central banks around the world. It will take over from a previous group established earlier this year, and will likely follow up on the BoJ’s 2019 research into CBDC’s. The bank further noted that it currently has no plans to issue its own CBDC, but that could change in the future.
Back in January the Deputy Governor of the BoJ, Masayoshi Amamiya, said in a statement:
“The speed of technical innovation is very fast. Depending on how things unfold in the world of settlement systems, public demand for CBDCs could soar in Japan. We must be prepared to respond if that happens.”
Although few details are known about the new research team, it will be part of BoJ’s payment and settlement department. The creation of the new team could also be connected to BoJ’s announcement from earlier this month, when the bank said it will begin experimenting with CBDCs to check its feasibility, from a technical perspective.
In January, BoJ joined a working group with five other central banks in order to explore the potential use cases for CBDCs, and share its experience. Other notable members of the group included the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Sveriges Riksbank (Sweden), and the Swiss National Bank.
While BoJ is increasingly looking into CBDCs, other central banks have already gone beyond the research phases of their own CBDC, and have already begun testing. Earlier this month, Thailand’s central bank announced its CBDC is entering into its third development phase, while noting that it has already been used for transactions with some businesses. The bank is now looking to expand the use of its CBDC to even more businesses in the country.
China, on the other hand, has already started a pilot test of its digital yuan in the cities of Shenzhen, Suzhou, Xiongan, Chengdu and the future site of the winter Olympics. Although the People’s Bank of China (PBoC) still doesn’t have a release date for its CBDC, it is already in contact with large businesses in the country, which could conduct real-world tests of its digital yuan.