Today the Bank of Japan (BOJ) said it is forming a working group to explore central bank digital currencies (CBDC) in depth, Reuters reports. This follows the global interest in CBDC as well as a general focus on digital currencies.
The group will sit within the payments and settlements department and build on the digital currency work done so far. There is no express intention to release a CBDC.
That previous work on a digital yen includes research papers such as reviewing a retail CBDC, legal issues and how a CBDC might work offline. The Bank has also had a multiyear CBDC research collaboration with the European Central Bank (ECB), Project Stella. Expanding on that, earlier this year, it joined a group of five other central banks from Canada, Europe, England, Sweden and Switzerland as well as the BIS to share CBDC research.
Unlike Sweden, Japan doesn’t yet suffer from an increasingly cashless society. More than four out of five retail transactions still use cash. However, there is an increasing number of digital payment options.
Earlier this year, Deputy Governor of the BOJ, Masayoshi Amamiya, explained that in Japan, a CBDC could potentially play a role with interoperability between Japan’s expanding array of payment providers.
Last week, Japan’s largest banking group MUFG said it would release its digital currency and payments solution later this year. Apart from MUFG coin, Mizuho launched the J-Coin with 60 banks. Additionally, there is PayPay from Softbank, SBI’s MoneyTap for interbank payments, chat app Line Pay and Rakuten Pay. That’s not including foreign apps such as Google Pay, Apple Pay, Alipay and others.