According to Japanese news outlet NHK, the Japanese Ministry of Finance plans to form an expert group in April to explore the feasibility of introducing a digital yen.
The ministry’s group will reportedly focus on creating a framework for a central bank digital currency (CBDC) and will refer to a technical study conducted by the Bank of Japan (BOJ) over the past two years. The ministry intends to use the findings of the expert panel to prepare for the possible issuance of a digital yen. CBDCs are digital versions of traditional currencies issued and backed by central banks, such as the U.S. dollar, Japanese yen, and euro. Unlike cryptocurrencies, which claim to be decentralized and not backed by any government or central authority, CBDCs are issued by central banks and run within a centralized system.
While CBDCs are still in the early stages of development, opponents of central bank-issued digital currencies have expressed concern that the technology would give monetary authorities unprecedented control over financial transactions. Additionally, some argue that a CBDC is unnecessary and traditional payment methods will suffice. Despite these concerns, many central banks around the world are still exploring the possibility of issuing CBDCs, and the debate surrounding their use continues. The United States, China, India and several European countries are already studying the feasibility of state-owned digital currencies.
As previously reported by Cointelegraph, the Central Bank of the United Arab Emirates (CBUAE) is making progress towards the full launch of its CBDC, known as the digital dirham, for domestic and cross-border payments. On March 23, the CBUAE announced that it had signed an agreement with G42 Cloud and R3 to provide infrastructure and technology for the implementation of the CBDC. Apart from addressing payment challenges, the digital dirham is expected to boost financial inclusion as the country aims to become a cashless society.
