Although Japan is not set on developing a central bank digital currency, the Bank of Japan (BoJ) continues to test a digital version of the yen. This is the case even though the BoJ is testing a digital version of the yen (CBDC).

Nikkei, a Japanese news agency, reported on November 23 that the Japanese central bank has started working with three megabanks and regional banks to conduct a test CBDC issuance. The Nikkei report was based on information obtained from the Nikkei news agency. The Nikkei news agency was the source of the aforementioned information.

As part of the pilot program, the digital yen will be tested, which will eventually replace the paper yen as Japan’s national digital currency starting in spring 2023. This will be the first time the digital yen will be used.

The Bank of Japan, along with other major private banks and other institutions, will work together as part of the experiment to identify and address any issues that may arise with the method by which customers deposit and withdraw money from their bank accounts.

According to the story, the pilot will test how Japan’s future CBDC works when offline, with a special focus on offline payments.

The Bank of Japan central bank plans to continue its CBDC experiment for about two years, and by 2026 it will make a decision on whether or not to develop a digital currency. This information comes from the article.

The statement comes at a time when an increasing number of countries around the world are launching research and development activities in CBDCs, with countries like China acting as models for the rest of the world to follow in their footsteps.

Despite the fact that the vast majority of governments around the world have been working tirelessly to implement a CBDC, some nations, such as Denmark, have made the decision to withdraw from the competition.

As key reasons for discontinuing their CBDC or CBDC-related efforts, central banks cited a number of issues as the main reasons for their decision, including the likelihood of obstacles to the private sector, unknown value and benefits, and other issues.

To date, there has not been a single central bank that has completely ruled out the possibility of launching a CBDC.