The final decision to issue a digital yen will be taken in 2026.
Japan has joined the list of countries around the world experimenting with their own digital currencies. It was stated in a report published by a leading financial daily in Japan that the central bank of the country would be collaborating with three megabanks to issue their Central Bank Digital Currency (CBDC) and test a pilot project through the same.
This was not a surprising announcement by the Central Bank of Japan as they winded up with the second part concerning their digital currency project, which started in April 2022. They would be testing the various functionalities of the digital yen in this project, starting early next year, and take a final decision in issuing an official digital currency within two years of the project. The various functions would include offline operations, withdrawals, deposits, etc.
Countries worldwide have been working on projects on centrally governed digital currencies (CBDC) and have started adopting technologies like blockchain and decentralized ledgers in general. Japan, like other countries, has also joined the race with the help of the private sector, and the megabanks involved in this project are expected to help the central bank in all aspects of the project. Governor Haruhiko Kuroda has also endorsed the idea of digital currencies in the recent past.