The Bank of Japan (BOJ) has forecasted that in 2021, there will be a considerably high demand for a national digital currency. According to the bank, the rapid and increasing development in the global technological climate will drive people to demand for a central bank digital currency (CBDC), supporting a tech-based financial system.
The report suggests that the BOJ intends to work on CBDCs to meet the people’s demands before they come. Although the bank has made no moves to issue the currency, it wants to be ready. However, it specifies that the CBDC will not replace cash but complement it.
“While the Bank of Japan currently has no plan to issue CBDC, from the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems, the Bank considers it important to prepare thoroughly to respond to changes in circumstances in an appropriate manner.”
The Bank of Japan intends to start doing some tests for a proposed CBDC by April 2021. According to the bank’s plan, it will use several commercial banks to work as intermediaries between the public and the government. The BOJ will test the feasibility of the CBDC and its functions via a Proof of Concept (PoC) test.
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