The Bank of Japan has initiated the opening phase of testing its own virtual currency, which will continue until March 2022. As a part of this stage, the watchdog will test the main functionalities of the CBDC as a payment tool. Overall, there are three stages of testing for the national digital currency are scheduled. The second phase is designed towards a more comprehensive study of the CBDC, and in the third phase, private businesses and regular users will get access to the circulation.
In early March this year, the Bank of Japan executive director, Shinichi Uchida, announced that the regulator does not prepare to issue CBDC just yet, but needs to be ready for its introduction in the future.
“We consider that launching an experimentation at this stage is a needed step. Contemplating current circumstances, including technical advancements at home and abroad, CBDC has the prospect to become an instrument for payments and agreements, and systems of this kind will likely become a world standard,” Uchida noted.
The Bank of China is the most likely candidate to issue its own national digital currency first. The regulator commenced trials with CDBC back in November 2020. The Chinese government is planning the implementation of the national digital currency to take place during the Winter Olympics, which are to be held in Beijing in 2022.
The launch of national digital currencies around the world will lessen the demand for Bitcoin and other decentralized cryptocurrencies, asserted the head of the Bank of Korea Lee Joo Spruce. He thinks that the main digital coin and altcoins are constrained in terms of their capability to serve as a payment method.
