Japan Commences Central Bank Digital Currency Test

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Last Updated on November 24, 2022 by Bitfinsider

According to a major newspaper report published today, Japan’s central bank has begun organizing a central bank digital currency (CBDC) experiment with the country’s key financial firms.

Nikkei reported on Wednesday that the Bank of Japan is collaborating with three megabanks and regional banks in the Asian nation to test a digital yen in 2020.

The publication noted that if all goes according to plan, the BOJ may introduce a CBDC in 2026.

Today’s news said that the BOJ’s experiment will examine how deposits and withdrawals can function with a digital yen.

A CBDC is a central bank-backed digital equivalent of a state’s fiat currency, such as the U.S. dollar or the euro. CBDCs are digital assets, albeit they differ from Bitcoin, Ethereum, and Dogecoin.

Because Bitcoin and other cryptocurrencies are decentralized, their transaction ledgers are maintained and validated by a distributed network of validators. CBDCs are controlled by a central authority, such as the government or central bank. Different nations throughout the world are at various phases of CBDC research and release.

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