Bank of Japan tests digital yen

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Bank of Japan considers blockchain for CBDC

Photo: cryptohexa.com

Last week, the Bank of Japan announced the central bank’s trial of the digital currency (CBDC). In the first phase, the regulator’s intention is to evaluate the possibility of launching a digital yen from a technical standpoint.

Bank of Japan wants to digitize cash like many other countries, which have also announced plans to create CBDC. For example, Japan’s nearest neighbor China has already started testing its digital currency. Also in February, news appeared that central banks in Great Britain, the Eurozone, Canada, Sweden and Switzerland were working on the creation of a national digital currency.

In its report, the Bank of Japan addresses two major technical barriers: universal access and stability. The first relates to ensuring access for all residents of the country, including those without smartphones. According to Nikkei, as of 2018, only 65% ​​of Japanese people own smartphones.

Stability also means the ability to work offline, even in the absence of power sources. The Bank of Japan emphasizes the importance of the availability of this equipment, even in any situation, such as an earthquake.

The Bank of Japan is considering using blockchain for CBDC. A centralized system has many advantages, such as high power and high transaction speed. But it also has disadvantages, for example, insufficient bandwidth.

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Back in 2016, NBU began studying the possibility of issuing an e-hryvnia. And already in 2018, a pilot project was implemented, within whose framework an innovative payment solution based on blockchain technology and the payment infrastructure of PS “Prostir” was tested. As part of the test, electronic hryvnias in the equivalent of 5 thousand UAH were issued for testing operations between electronic wallets.

Read: State Cryptocurrency: Why Central Banks

According to the content CoinTelegraph


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