Since 2021, the Bank of Japan (BOJ) has been carrying out central bank digital currency experiments to test the technical feasibility of the core functions and features of the retail CBDC ecosystem. The second stage of testing has begun in April 2022.
Since credit cards, internet banking services, and e-money as payment tools among consumers in Japan are very popular, the CBDC concept has not received significant support. Therefore, BOJ is not considering the CBDC implementation in the immediate future.
The general perception is that consumers have not found the advantage of using the CBDC. The National Supermarket Association of Japan reported that over 99% of supermarkets are equipped with credit card payment tools, 77% utilize QR codes and 38% have developed their own cashless payment system.
Although the use of digital payments is rising, cash remains popular in many economies. Cash is considered safe and more useful in case of natural disasters or military conflicts that cause the destruction of computer systems or power shortages.
In conclusion, the BOJ has to continue to accumulate knowledge of blockchain technology, while guaranteeing financial stability and financial innovation in Japan. The recent delay on CBDC might be the result of such a duty towards the country’s citizens.