The creation of a digital version of the yen will be considered by the Japanese government. Photo: AFP

The Japanese government is expected to include consideration of a central bank digital currency (CBDC) in its official economic plan, Cointelegraph reported. The news comes 10 days after the Bank of Japan’s announcement that it will start experimenting with the digital yen to check its feasibility from a technical perspective.

According to Nikkei, the consideration of a CBDC will be included in the Honebuto Plan for Economic and Fiscal Revitalization. The Honebuto Plan is the basis for Japan’s economic and fiscal policy and the report says the Japanese government “will consider a CBDC while coordinating with other countries.”

Japan and CBDC

After China began testing its CBDC or digital yuan, the Japanese government accelerated preparations for its own CBDC. In March, Kozo Yamamoto, Liberal Democratic Party (LDP) Member of the House of Representatives and a former official at the Ministry of Finance urged Japan to implement CBDC fast: “If Japan doesn’t issue a digital currency and people in the world use other digital currencies, the Japanese yen will be forgotten and lose its sovereignty.” 

The shift in attitude has been swift. In July 2019 the Bank of Japan maintained that “they had no plan to issue CBDC.” Yet, in a report this month it announced it would begin experimenting with a central bank digital currency. 

According to Nikkei, the Japanese government, and not the Bank of Japan, has the ultimate right to judge whether or not to issue a CBDC. 

In February, the central banks of Britain, the eurozone, Japan, Canada, Sweden and Switzerland reportedly announced a plan to collaborate on researching issuing digital currencies.

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