The Japanese Ministry of Finance is setting up a panel for the central bank digital currency (CBDC) called the ‘digital yen. The panel will discuss creating a framework for a CBDC, using the findings from the concept testing experiments that have been conducted by the Bank of Japan for over two years.
Officials from the Bank of Japan have stated that they currently do not have urgent plans to issue the digital yen, but the Ministry of Finance continues to take steps to prepare for a potential introduction of the digital yen. Japan aims to lead discussions on regulating digital currencies at the G-7 summit.
The launch of the digital yen could have significant impacts on the country’s economy. Cash transactions only account for 51.1% of all transactions, and widespread adoption of the digital yen could further reduce the use of cash.
Japan had previously announced the launch of a pilot program for digital yen testing, and it is stated that they will prepare for the introduction of the digital yen taking into account the views of the panel.