The Bank of Japan confirmed on Friday that it is to start trialling a central bank digital currency, or CBDC, to verify its technical viability. 

“The BoJ wants to digitize cash, but it remains to be seen if Japan can catch up with China, which has already begun testing its own CBDC. This is the first time the BoJ has revealed it would commence a proof-of-concept process with the digital yen, but the bank is yet to reveal a timetable,” reported Coin Telegraph.

In a report called Technical Hurdles for CBDC, the central bank stated it would “check the feasibility of CBDC from technical perspectives, collaborate with other central banks and relevant institutions, and consider introducing a CBDC.”

Japanese news site Coin Post wrote: “Although the BoJ has not changed its position that it currently has no plans to issue a CBDC at this point, it is expected to work with private financial institutions and payments companies to solve technical issues in order to keep up with digital payment solutions that are being developed overseas.”

Technology and finance industry insiders in nearby South Korea have told Cryptonews.com that the central Bank of Korea’s own accelerated CBDC operations are a direct response to China’s “lightning-fast progress with its own digital yuan – reportedly, already in advanced pilot operation in some five cities across the country.”