According to a Wednesday Nikkei report, the Bank of Japan (BoJ) has experiments on the digital yen planned with three megabanks and regional banks in the nation.
The BoJ will begin working with commercial banks and other organizations in the spring of 2023 to identify any issues with deposits and withdrawals and verify that a central bank digital currency (CBDC) can function during natural catastrophes and in places without an internet connection.
The “three megabanks” of Japan are typically Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., and Mitsubishi UFJ Financial Group Inc., despite the fact that the study omitted their names.
The experiment, according to the report, would run for two years, and the central bank will determine whether to issue a CBDC in 2026.
By creating a test environment for a digital yen and investigating fundamental operations including issuance, distribution, and redemption, the BoJ joined a growing number of central banks globally researching CBDCs.
An official from the BoJ stated last year that the goal of the central bank is to make sure that a CBDC promotes competition among private payment providers and is open to all members of society.