The Bank of Japan has said that a digital currency is now its “top priority,” as the central bank looks to catch up with the progress made by its counterparts in China.
Bank of Japan has been experimenting with a central bank digital currency (CBDC) and the technology behind it. However, to date, the bank is yet to officially develop a digital currency, and there are no imminent plans for a launch.
However, the Japanese government has indicated that it is prepared to consider measures in support of a digital currency in the upcoming legislative program, which could pave the way for a more formal introduction.
The developments follow reports from China which consistently suggest the country is leading the world in work on a digital currency. This, according to Japan’s Liberal Democratic Party, could ultimately pose a national security threat to the country, with calls for advancing research efforts gathering apace.
Senior lawmakers in Japan have been increasing pressure on the government since February of this year. With the central bank now committed to bringing forward its work on the digital yen, it looks like Japan could be next to join the CBDC arms race.
The developments come at a time when central banks around the world are exploring digital currencies, and looking at ways of implementing digital payments into their economies.
Similar efforts in the Philippines are also underway, after the country’s central bank commissioned its own research into CBDCs. Earlier this week, Bangko Sentral ng Pilipinas Governor Benjamin Diokno confirmed the bank was investigating the technology, and that initial results from its findings would be published in the near future.
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