Japan’s Ministry of Finance plans to set up a panel to examine the feasibility of launching a central bank digital currency (CBDC).
It was stated that the panel will be established to create a framework for a digital currency in addition to the work carried out for two years. The digital yen pilot program, which will involve the Bank of Japan (BOJ) and other financial stakeholders, is also planned to be launched at the same time.
Japan Plans to Lead Regulations
While BOJ officials have stated that they have no immediate plans to issue a digital yen, the finance ministry is taking steps to prepare for the possible introduction of such a currency.
Japan, which heads the G-7 group of industrialized countries this year, also plans to drive tougher global crypto regulations. According to the report published by Kyodo, Japan aims to lead the discussion on the regulation of digital currencies at this year’s G-7 summit.
Japan’s switch to the digital yen could have significant effects on the country’s economy, which is largely cashless.
According to a research report by Statista, cash transactions only account for 51.1 percent of all transactions in the country. Widespread adoption of the digital yen could further reduce cash use and disrupt the country’s traditional banking system.
While Japan has been relatively open to cryptocurrencies in recent years, it officially recognized Bitcoin as a form of payment in 2017. The introduction of the digital yen could lead to increased regulatory scrutiny and limit the use of other cryptocurrencies.
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