The Bank of Japan (BOJ) outlined an approach for Central Bank Digital Currency (CBDC) to ensure stability and efficiency in the management of payment and settlement systems, according to press release. BOJ has no plans to issue CBDC but anticipates a surge in public demand for the currency.

  • Expected Functions and Roles of CBDC 
    • Introduce a payment instrument alongside cash
    • Support private payment services
    • Develop payment and settlement systems 
  • Cores Features Required for CBDC
    • A two-tiered payment and settlement system for central bank and private sector
    • Universal access for devices and cards used in payments and transfers
    • A counterfeit deterrence technology to enhance security and prevent illicit activities
    • CBDC system to be available 24/7/365 to end-user, design to support offline use
    • CBDC to allow instant payment capabilities
    • Interoperability between CBDC and other payment and settlement systems to be enhance
  • Areas of Consideration
    • Banks to build role-sharing agreements and cooperation with central bank and payment service providers to promote innovations
    • Role sharing to ensure privacy in handling end-user information
    • Economic design and functional requirements to strengthen price and financial stability
    • CBDC to build cross-border payments
  • Next Steps
    • Experiments to test technical feasibility, core functions, and features of CBDC
    • Bank to explore institution arrangements for improvements
    • Bank to coordinate with stakeholders domestically and internationally to strengthen CBDC

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