If central banks aspire to enhance their settlement systems, no single digital currency can dominate global transactions, a senior official
of the Bank of Japan (BoJ) said, brushing aside concerns that China’s rapid progress on a digital yuan could disrupt markets.

China may have a “first-mover” advantage on issuing a digital currency

Last week, seven major central banks, including the BOJ, laid out main concepts for issuing CBDCs in efforts to catch up with China and private ventures, such as Facebook’s proposal to issue its stablecoin. Japan’s central bank announced it would begin experimenting next year with its CBDC. He further noted that all the time, new technology is invented. Even if you are ahead of the technology now available, as time passes, you might get stuck into what is old technology.

Bank of Japan to start experimenting with its CBDC next year

The Bank of Japan said that next year it would start experimenting with running its digital currency backed by the central bank. The move came in tandem with a group of seven major central banks, including the Bank of Japan, announcing what they see as the central bank’s digital currency (CBDC) core characteristics, such as durability and a simple legal structure.

In April 2021, the Bank of Japan said it would perform the first phase of experiments on the core functions of CBDCs, such as issuance and delivery.

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