Japan’s Finance Ministry is planning to establish an expert panel to explore the feasibility of introducing a digital yen
According to Japanese news station NHK, Japan’s Finance Ministry intends to create an expert panel in April to investigate the viability of adopting a digital yen.
The ministry’s panel, according to the article, will concentrate on developing a framework for a central bank digital currency (CBDC) and will make use of a technical study carried out by the Bank of Japan (BOJ) over the last two years. The ministry plans to use the expert panel’s recommendations in order to get ready for the potential release of a digital yen.
The U.S. dollar, the yen, and the euro are a few examples of historic currencies that are digitally reimagined and backed by central banks as CBDCs. CBDCs are issued by a central bank and function in a centralized system, in contrast to cryptocurrencies, which claim to be decentralized and unbacked by any central authority.
Opponents of central bank issued digital currencies have raised fear that this technology would offer monetary authorities unparalleled control over financial transactions, despite the fact that CBDCs are still in the early phases of development. Some people also contend that conventional modes of payment suffice and that CBDCs are not required.
Despite these reservations, a number of central banks throughout the world are looking into the possibility of issuing CBDCs, and discussion over their application is still ongoing. State-run digital currencies are already being investigated by the US, China, India, and several European countries.
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