Japan Finance Ministry expert panel
Central Bank Digital Currency (CBDC) framework
Bank of Japan's technical study
The Japanese Finance Ministry has announced plans to form an expert panel in April to assess the potential for launching a digital yen. This report comes from NHK, a well-known Japanese news outlet.
The ministry's panel will concentrate on developing a framework for a central bank digital currency (CBDC), drawing upon a technical analysis conducted by the Bank of Japan (BOJ) over the past two years. The Finance Ministry aims to utilize the panel's findings to lay the groundwork for the potential issuance of a digital yen.
CBDCs represent digital counterparts of traditional currencies, such as the US dollar, yen, and euro, and are issued and supported by central banks. In contrast to cryptocurrencies, which claim decentralization and lack backing from governments or central authorities, CBDCs are centralized and issued by central banks.
Although CBDCs remain in their infancy, critics of centrally issued digital currencies have raised concerns that this technology could grant monetary authorities unparalleled control over financial transactions. Furthermore, some individuals argue that CBDCs are unnecessary, as traditional payment methods already suffice.
Nonetheless, numerous central banks across the globe, including those in the United States, China, India, and several European countries, are investigating the prospects of introducing CBDCs. The ongoing debate on their utilization continues to unfold.
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