The financial landscape is rapidly evolving, and central banks worldwide are exploring the potential of digital currencies. At the forefront of these endeavors is Japan’s Central Bank. By initiating dialogue involving 60 enterprises, the Bank of Japan (BOJ) is making significant strides towards a digital yen. However, the bank’s final decision on the matter is yet to be made.
The Vision: Digital Yen
The BOJ’s vision is clear. They are laying the groundwork for a potential central bank digital currency (CBDC), also known as the digital yen. The bank’s engagement with some of Japan‘s major companies is an indication of this. However, the final green light is yet to be given by the government and parliament.
The Players: Who’s Involved?
The list of 60 companies selected for discussions includes major Japanese entities. These include the electronics giant Sony, convenience store operator Lawson, Toyota’s financial division, and East Japan Railway.
The Global Context: CBDCs and Central Banks
Central banks globally are showing a growing interest in CBDCs. This stems from a desire to stay relevant in the digital age where cash usage is on the decline and digital payments are on the rise. By developing their digital currencies, they aim to control digital payment systems and not leave them solely in the hands of private sector entities.
According to a recent survey by the Bank for International Settlements (BIS), about two dozen central banks from both emerging and advanced economies are expected to have their digital currencies in circulation by the end of this decade.
