It seemed just like yesterday when the world was skeptical about Web3, its features, and the fundamental development it could add to the age of technology in the modern world.
Today, almost every country has embraced the Web3 universe and welcomed blockchain technology into their daily activities. It is no surprise that Japan, a country that is famously known for its innovation and high-end technological advancement, has adopted Web3 services into its financial sector.
The Bank of Japan (BOJ) announced its plans to introduce its digital yen currency. The local newspaper, Nikkei, reported on November 23 that the bank has revealed it is in partnership with three megabanks and regional banks in testing its pilot digital currency, which may be launched next spring.
The Central Bank of Japan will finalize its decisions in 2026 after it has tested the digital currency against several common issues that might affect its functionality within the two years in between. The problems the digital yen will be examined against are; difficulties with withdrawals and deposits from bank accounts.
This transition and embrace of cryptocurrency are highly anticipated. It will come after the Bank of Japan (BOJ) completes the second stage of its central bank digital currency (CBDC) experiment, which has been in motion since April.
This experiment is scheduled to last a year. It will be on till next year, after which the bank will test the digital currency for the next two years, verifying its functionality in the face of specific issues guaranteed to run the digital currency to the ground.
The bank mentioned that it is in partnership with private financial institutions to ensure that CBDCs will be capable of being transferred between banks, and within the two years before finally making its decision to release the digital currency, the bank will also test if specific actions can still be carried out; primarily offline when there is a power outage, and the internet services go off.
Although the Bank of Japan has yet to decide if it will be issuing its digital currency, Governor Haruhiko Kuroda announced earlier this May that creating a retail Central Bank Digital Currency (CBDC) could be an alternative to achieve a seamless and safe infrastructure in Japan.
The Governor also called at a conference at that time for boosted efforts by worldwide policymakers to contain threats that may arise from the broad usage of private digital currencies.
Lately, there have been several countries integrating the Web3 space into their financial sector, and recently, the Reserve Bank of India announced its plans to launch its digital rupee pilot next month. This dive into distributed ledger technology is a big move for any country.
Conclusion
The vision of the Bank of Japan (BOJ) to spread its financial sector’s wings and dive into distributed ledger technology (DLT) is commendable, as the bank announced that it would be launching its digital yen, pilot next spring.
