Despite the emergence of a growing number of CBDCs worldwide, some nations, such as Denmark, have opted out of the digital currency revolution. Central banks believe private businesses will encounter difficulties, the value of a CBDC is questionable, and it may even deliver negative outcomes. However, no central bank has explicitly dismissed the possibility of developing one.
The Bank of Japan continues experimenting with a potential CBDC despite Japan’s uncertainty on whether to issue one.
Japanese megabanks and regional banks are collaborating with the country’s central bank to experiment with a CBDC issuance pilot, local news agency Nikkei reported on Nov. 23.
In spring 2023, Japan plans to begin issuing a national digital currency, a digital yen. To test the system, a pilot will offer demo experiments.
During the trial, the BoJ will work with large commercial banks and other organisations to detect and remedy problems with deposits and withdrawals on bank accounts. The report says that the offline test of Japan’s possible CBDC, which would handle payments without the internet, will be conducted as part of the pilot.
Japan’s central bank plans to extend its CBDC experiment for two more years, and then decide whether to issue a digital currency by 2026, the report says.
Countries around the world are increasingly launching CBDC research and development initiatives, with China leading the global CBDC race. In light of the news, other countries are also starting to consider creating their own CBDCs.
The Reserve Bank of India is planning to launch a digital rupee experiment in collaboration with major local banks in December, . The Federal Reserve Bank of New York’s Innovation Center, in mid-November, launched a proof-of-concept CBDC trial with banking giants BNY Mellon, Citi, HSBC and others.
The Danish central bank has decided to abandon its CBDC or CBDC-related projects, citing its problems in the private sector and questionable value and benefits. Nevertheless, no central bank has ruled out the possibility of launching a CBDC completely.