The Bank of Japan has stopped work on its own digital currency project due to a lack of public interest.
Like many other central banks around the world, Japan’s central bank (BoJ) had been conducting activities since 2021 to explore the potential of central bank digital currencies (CBDC) in order to experiment with the functionality and features of the CBDC retail ecosystem. The second phase of testing began in April 2022, but even then the BoJ did not consider the introduction of the digital yen in the short term.
After testing, the Central Bank of Japan concluded that the country’s citizens have almost universal access to the banking system, so the issue of expanding access to financial services is not important from a political or economic point of view. And the widespread use of digital and mobile technologies to pay for goods and services calls into question the need to develop alternative, unpopular forms of payment.
The public has also found the use of CBDC to be unattractive. In particular, existing payment instruments provide tangible benefits – for example, points that can be earned from the use of payment services, which can be accumulated and used for subsequent purchases.
As a result, the Bank of Japan explained the abandonment of the digital yen program by the lack of interest from citizens.
Recall that the head of the Bank of Japan criticized bitcoin.