Japan just moved one step closer to having a central bank digital currency (CBDC). Today, the country’s central bank, the Bank of Japan (BOJ), announced it would be launching a pilot program to test a digital yen.
The decision comes after several countries have been investing time and resources into the concept of central bank digital currencies. It also looks like an indication Japan intends to compete with China, which for now, is the frontrunner in the CBDC effort.
The move should come as no surprise, as the BOJ has been studying whether to launch a CBDC for two years now. Worth noting, the pilot program is being launched amidst a transition of leadership: Haruhiko Kuroda will be succeeded by Kazuo Ueda in April of this year.
With the new CBDC-focused pilot program, the BOJ aims to conduct simulated transactions with private businesses and entities to prepare in case the government issues a digital yen. The program is expected to last several years and could involve real transactions with retailers and consumers in the future.
Kazushige Kamiyama, the head of the department overseeing the development of a CBDC for the BOJ, said that no timeframe is in place for a digital yen because the central bank needs to “move in lockstep with other advanced economies.”
Among other advanced economies investigating a CBDC is the U.S. The Federal Reserve has been actively exploring how it could launch a digital dollar, which some are referring to as Fedcoin.
Geographical Entities Invest Time and Money in Web
Not everyone in Web3 agrees with the idea of CBDCs. However, the fact that several countries are interested in digital currencies shows that crypto and Web3 technologies are influencing the minds and policies of world leaders. And CBDC isn’t the only new technology of interest for geographical entities.
At Rarity Sniper, we’ve written dozens of articles about countries and cities investing in Web3. Here are some of the most recent headlines:
- Saudi Arabia Announces Sandbox Partnership
- Indonesia to Launch National Crypto Exchange in 2023
- China Launches Nationalized NFT Marketplace
- Dubai’s Metaverse Strategy Approved by Crown Prince
- Norway Opens Tax Office in Decentraland
- Miami Gardens Launches Metaverse City
Leaders and policymakers around the world are showing interest in Web3 technology, and not just digital currencies. The metaverse, NFTs, blockchain, and crypto are being used to increase tourism, create local Web3 jobs, and in the case of Norway — help citizens with their taxes.
It could take years before Japan decides to issue a digital yen. But the creation of its pilot program to investigate a CBDC before it becomes a reality looks like the first step. We’ll be following up on any new developments in the story.