July 21, 2024
Japan Aims for CBDC Legal Resolution by Q3 2024
Latest Cryptocurrency News

Japan Aims for CBDC Legal Resolution by Q3 2024

The Bank of Japan (BoJ) and the Japanese government have held their first official meeting to discuss the potential issuance of a central bank digital currency (CBDC). Reports indicate that on January 26, both entities agreed to address the legal issues related to the digital yen in the spring of 2024, although neither the BoJ nor the government has officially confirmed the launch.

A national discussion is anticipated before any decision is made, and implementation, if approved, is not expected before 2026. In December 2023, an expert panel in the Ministry of Finance recommended the BoJ issue a digital yen promptly. The panel emphasized the importance of the CBDC coexisting with cash and called for minimal storage of personal data. The BoJ completed the second phase of CBDC testing in May 2023, involving 100,000 users and various transaction volumes.

Following the successful experiment, the BoJ proceeded to its scheduled CBDC pilot project, focusing on examining the end-to-end process flow and establishing connections with external systems. Japan, known as a “cash-based” society, has consistently shown a positive stance toward CBDCs. Despite this, the country’s pro-CBDC position does not translate into an anti-crypto policy, as local businesses may be exempt from taxes on unrealized gains from cryptocurrency holdings starting in April 2024.

While Japan explores CBDC possibilities, other Asian countries like China are actively implementing their digital currencies. Hong Kong, Singapore, Malaysia, India, and South Korea are also engaged in CBDC research. In January, the National Bank of Cambodia announced plans to introduce a CBDC, named “Lanka Pay,” by the end of 2024.

Image by tawatchai07 on Freepik

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