While the BOJ’s plans are still in the research phase, Shinichi Uchida, CEO of the Bank of Japan (BOJ), said simplicity will drive the design of the digital yen’s central bank.
According to Reuters, Uchida said this during a keynote speech on Friday, and called for the development of methods to ensure that CBDCs coexist with existing private payment channels.
For Uchida, vertical integration of the digital yen into the private sector payment matrix would require a simple CBD design.
Part of this simple design could be to build an infrastructure that allows people to use both CBDC and electronic payment services from a single wallet, so they can seamlessly switch between the two channels.
Vertical integration will encourage the private sector to switch to Japanese CBDCs and thus create more valuable services, Uchida said.
As Cointelegraph previously reported, the Bank of Japan has launched preliminary pilot studies on the possibility of issuing digital currency from the central bank. It is expected that the second phase of digital yen research will begin in the second quarter of 2022.
Japan is one of several countries in the Asia-Pacific economic arena that is considering the benefits of a floating digital central bank currency, especially in the wake of China’s electronic digital currency payment project.
About the topic: The head of the Bank of Japan says that the installation of the central bank’s digital currency can not wait until an hour of distress
In March, the Bank of Japan announced the establishment of a liaison and coordination committee, which will include representatives from the public and private sectors, tasked with collaborating on a test of the central bank’s digital currency.
Japanese CBDC studies may also include exploring cross-border interoperability with other sovereign digital currencies, perhaps as a counterweight to the Chinese digital yuan in the international arena.
Cooperation on international issues related to the CBD has also become an important area for many countries developing their own national digital currencies.
Meanwhile, global financial bodies such as the Bank for International Settlements continue to push for central banks’ digital currencies to counter the spread of cryptocurrencies.