The Bank of Japan announced the latest plan to test and issue the national digital currency. The Japanese authorities are concerned about the recent advance of the Chinese government and want to accelerate their efforts to issue a digital currency.
Recent meetings and discussions between BOJ executives and industry experts focused on the central bank's digital currency (CBDC) as a high priority issue. The bank and the authorities consider that CBDC is an aspect of national security, according to a local news outlet.
Takeshi Kimura, CEO of the central bank's Payment and Settlement Systems Department, said his team is working with the private sector to gain more insight into the technical aspects of CBCD.
He said that easy access to the new digital currency is one of the most important features to consider. Recoverability is the other critical feature that CBDC needs. Digital currency needs to be able to serve customers in any conditions, such as natural disasters and other emergencies.
According to Kimura, there has to be a decrease in the use of the regular currency, if the Bank of Japan wants to issue a functional digital currency, according to Kimura. In other words, when cashless payments in Japan increase, it will be an indicator that a national digital currency is needed.
Right now, Japan is one of the countries in the world with the largest circulation of traditional banknotes. After all, the infrastructures for a national digital payment system should be in place and function as a force for people to migrate to more efficient solutions.
Many countries around the world, including Japan, are concerned about China's digital yuan plans. They believe that the Communist Party wants to dominate the global financial system and drive the USD away. As a result, many of the national banks around the world have started to issue digital currencies.
Japan, as one of the world's leading economies, has to do more to issue a CBDC. In June, an LDP policy committee released a proposal that said:
"Having China with its hands first on the technology standards for CBDC could become a threat to national security."
So the government has recognized this momentum and is doing everything possible to accelerate the programs.
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