Japan central bank to launch digital currency trial: report

Image from Shutterstock

Japan’s central bank is set to launch trial transactions of digital yen together with the country’s three top banks in the spring of 2023, the Nikkei newspaper has reported.

The Bank of Japan (BOJ) will work together with Sumitomo Mitsui Financial Group, Mizuho Financial Group and Mitsubishi UFJ Financial Group during the two-year pilot program to examine infrastructure for digital yen, Nikkei reported on November 23.

The exercise will test deposits and withdrawals from accounts, and check whether the currency can work without internet access in an emergency, it said. If all goes well, the central bank will decide whether to launch a digital currency as soon as 2026, Nikkei said.

The BOJ has been experimenting with a system infrastructure for digital yen since April last year, covering basic transaction functions such as currency issuance and circulation. 

In January, BOJ governor Haruhiko Kuroda stated that he expected a decision could be made by 2026 on whether or not to issue digital yen.

Citing BOJ, Nikkei reported that private banks are eager to join the pilot program while the central bank is also hiring fintech firms and IT vendors to help develop security measures such as identity verification.