Japan's central bank to issue experimental digital yen in early 2023

Quick Take

  • Japan’s central bank will begin a CBDC experiment in early 2023, according to a report from Nikkei.
  • Several banks will stress test a digital yen for more than two years.

The Japanese central bank will begin experiments with a proof-of-concept digital yen early next year, Nikkei reported

The Bank of Japan will work with several unnamed financial institutions to stress test a central bank digital currency. Tests will include how deposits and withdrawals can work, and also what happens when no internet access is available. 

A decision will be taken in 2026 on whether to formally adopt a digital yen.

Most large economies are trying to develop some form of state-backed digital currency, with some, including China and Nigeria, already rolling out wallets for public use. Those experiments may prove unsuccessful but it's important for central banks to ensure there was a widely available digital settlement asset, Jon Cunliffe, deputy governor of the Bank of England said on Monday. He warned that a few large commercial players might otherwise dominate and control crucial payment services.

Tom Matsuda contributed reporting for this story.


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About Author

Benjamin Robertson is senior newsletter writer at The Block, based in Oxford. He covers global crypto policy and regulation news. Before joining, he worked at Bloomberg News where he wrote about crypto, regulation and finance in Hong Kong, and later reported on private equity and asset management in London. Get in touch via email at [email protected] or on Twitter at @BMMRobertson

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