Despite investigating the technical aspects of issuing a central bank digital currency (CBDC) since 2021 and beginning the second phase of experimentation in April, Japan’s central bank has postponed its launch because of public interest.
According to Sayuri Shirai of Asia Times on July 20, the Bank of Japan (BOJ) is not contemplating CBDC deployment shortly, owing to the popularity of credit cards, online banking services, and e-money payment tools among Japanese customers.
favoured payment methods
The private sector also promotes the broader use of digital and mobile payment technology. In addition, most Japanese residents allegedly enjoy unrestricted access to the banking system, and the necessity to encourage financial inclusion for excluded groups has not yet emerged.
In addition, most customers find private sector-based payment systems more appealing owing to perks such as collecting and earning points that may later be used to pay for other products or services.
Japan’s CBDC experiment
As stated by Finbold, the BOJ began the experimental phase of assessing the viability of issuing a CBDC in April 2021. This phase lasted until March 2022, when the BOJ went on to the second step of defining its broad powers.
BOJ Executive Director Shinichi Uchida dismissed the notion of the central bank adopting the digital yen to achieve negative interest rates in mid-April, as the central bank was still planning CBDC trials.
The institution’s third phase, in which commercial enterprises and end-users were to engage in a pilot program if judged essential, has reportedly been put on hold indefinitely.