Bank of Japan Ramps up Research into Central Bank Digital Currency

The CBDC race is about to heat up again with nations across Asia leading the way in crypto research. Japan is the latest to accelerate progress, joining China and Thailand, which are already well underway with their respective digital currencies.

Japan Forms Crypto Research Team

The Bank of Japan (BoJ) stated on Monday that it has started with the formation of a ‘Digital Currency Group, ’ which will operate under the umbrella of the Payment and Settlement Systems Department. The primary goal of the new group is to hasten the research on central bank digital currencies.

With a staff of about 10, the group will be headed by Akio Okuno, a senior official at the department, according to reports. The team will follow up on the BoJ’s efforts so far on CBDC, which includes joint research it has been conducting with other major central banks, including the European Central Bank and the Bank of England, since January.

The report added that three private Japanese banks, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corp, in addition to companies including East Japan Railway Co. and KDDI Corp. set up a consortium in June to study interoperable cryptocurrencies.

The BoJ has, on several occasions, stated that it has no immediate plans to digitize the yen, but this latest move suggests otherwise. Further progress by neighboring China may have also catalyzed the Japanese bank’s research plans for fears of getting left behind.

China Leading The Way

Despite major economic woes induced by the ongoing pandemic, China is forging ahead with its Digital Currency Electronic Payment (DCEP) project. The number of large companies joining the crypto yuan project, as testing and implementation partners, is solid evidence of the progress being made.

Tencent-Backed food delivery firm, Meituan Dianping, has been one of the first to begin testing of the DCEP as reported by CryptoPotato. The company has a huge volume of daily transactions amounting to billions of dollars from meal deliveries to online travel services, so it makes an ideal testing partner. It also has almost 450 million customers, and around 6 million companies using it to sell their products.

The testing of China’s DCEP is already being conducted in four major cities: Shenzhen, Suzhou, Chengdu, and Xiong’an.

Thailand’s central bank is also pushing forward with plans to trial its crypto baht with local businesses as part of the third phase of the project’s development. The Bank of Thailand (BoT) is ready to deploy its CBDC to corporations for further testing before the public can use it. The Thai baht has been one of the strongest currencies in Asia, remaining resilient despite the economic downturn.