Bank of Japan Starts Talks With 60 Companies on Trial Run for Digital Yen Program

The Bank of Japan has initiated discussions with 60 companies to participate in a pilot programme for developing a digital yen. This move aligns with global efforts by central banks to issue digital versions of their currencies for retail use. The discussions will cover topics such as the business and technological features of retail settlements using a central bank digital currency (CBDC). The BOJ has not yet made a decision on whether Japan will issue a digital yen, as this would require approval from the government and parliament. However, the inclusion of major Japanese companies in the discussions indicates that Japan is progressing towards a potential launch.

The group of 60 firms selected to join the discussions includes megabanks, regional lenders, electronics giant Sony, convenience store operator Lawson, the financial arm of auto giant Toyota, and East Japan Railway.

In response to the declining use of cash and the need to prevent the private sector from dominating digital payments, central banks worldwide are studying and developing digital currencies for retail use. According to the Bank for International Settlements (BIS), approximately 24 central banks across emerging and advanced economies are expected to have digital currencies in circulation by the end of the decade.

© Thomson Reuters 2023

---