Japanese Central Bank has recently shared some important updates about the Digital Yen testing. The Asian nation has decided to weigh in favor of Sweden’s approach rather than following China’s example for testing their local Central Bank Digital Currency CBDC project. The Chinese government has been planning to launch and introduce its digital Yuan project as soon as possible to the masses.
Meanwhile, the financial and blockchain experts in Sweden have planned to keep their CBDC project in the testing phase for longer to extend their market research criteria. BOJ expressly stated that the financial institution is following the example of Sweden and the ruling on whether CBDC will make it into the public will be revealed by 2026.
Bank of Japan officials have dubbed CBDCs a method of settlement. The bank postulates that the project is still in the experimental phase and the developers are still working on the project to fix critical issues related to the digital Yen. BOJ head, Kazushige Kamiyama told Bloomberg that a gradual and well-planned implementation plan seems more viable to the organization.
He further explained that the Chinese government is expediting the process and already initiated the pilot phase of the digital Yuan during the Beijing Winter Olympics. Meanwhile, Swedish bank Riks is working on a more pacified approach by deepening the technical research benchmark to study the placement of CBDC into the current financial ecosystem.
Strong Economies can Easily Adopt CBDC Payment Models
Speaking to a Bloomberg reporter, BOJ head Kamiyama claimed that it is more feasible for the emerging economies to launch electronic money in comparison to the developed nations. In her recent cryptocurrency address, US Treasury Secretary Janet Yellen pointed out that CBDCs and stablecoins might be able to become the new standard for financial transactions rather than cryptocurrencies.
Meanwhile, DTCC recently introduced Project Lithium to this end. Depository Trust and Clearing Corporation or DTCC is a government agency that acts as a securities processing network in the United States. Project Lithium aims to research the impact of real-time digital transactions on the DTCC settlement process. Thus far, the USA is also extending its CBDC research phase.