Global central banks are developing digital currencies to modernize their financial systems, removing threats from cryptocurrency and speeding up domestic and international payments
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The Bank of Japan (BOJ) began the experiment on Monday to study the feasibility of issuing its digital currency to join the efforts of other central banks aimed at matching innovation in the sector achieved by the private sector.
The first phase of the experiments, the BOJ said in a statement, will be carried out by March 2022, with the central bank focusing on testing the technical feasibility of issuing, distributing and redeeming digital currency (CBDC).
The BOJ will then go into a second phase of experiments that will investigate more detailed tasks, such as setting limits on the amount of CBDC that each unit can hold.
If necessary, the central bank will initiate a pilot program involving payment service providers and end users, BOJ executive director Shinichi Uchida said last month.
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Uchida told a committee of policy makers and bank lobbies looking at CBDC, “While there has been no change in the attitude of the BoJ, there are no plans to release CBDC at the moment, we believe at this stage Starting the experiment is a necessary step.
Global central banks are developing digital currencies to modernize their financial systems, removing threats from cryptocurrency and speeding up domestic and international payments.
While China leads the pack, the BoJ is accelerating efforts to catch up with the plan announced in October on how to start operating its own digital currency.
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