A Test-Case Digital Yen
The Japanese central bank has announced plans to enter the digital currency market. A new digital currency will be tested to determine the viability of a digital currency in Japan. This testing phase of the digital yen is expected to last two years.
Additionally, a number of banks will be engaged in the stress testing of this new digital money. Early 2023 would see the start of this project, which is intended to be a proof-of-concept test.
The Bank of Japan will collaborate with a number of unnamed banks and financial organizations to test the viability and usefulness of a digital currency also known as the digital yen.
These run-on testing would involve carrying out trade operations including figuring out how deposits and withdrawals with this currency would work. Testing the functionality of this digital money in the absence of internet connectivity is another significant requirement. As is well known, crypto token transactions cannot take place offline since internet services are required to conduct these transactions, whether they be deposits or withdrawals.
Following this two-year trial period, a definitive decision on whether or not this digital money will be approved by the Japanese government and citizens will be made in 2026.
Countries Embarking On A Digital Currency Agenda
Most global economies are preparing to shift to the digital space by investigating the prospects of a digital currency. Countries such as China have long been on this quest to create a new CBDC known as the digital rupee. Nigeria has also introduced the digital Naira, also known as the E-naira, into its sector, which would act as a backstop to fight inflation if successful.
However, although some of these currency projects may fail, some may flourish, it is critical for central banks to guarantee that there is a generic digital currency that touches all parts of the global economy, Jon Cunliffe, the deputy governor of the Bank of England commented. He also cautioned that if this is not done immediately, the top people in power would seize the opportunity to exploit this flaw in the global system to benefit them and their plans.
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