Japan’s Finance Ministry is reportedly planning to appoint a panel of experts this coming month in order to determine the feasibility of issuing a digital yen. This, according to a report from NHK.
The ministry’s panel in Japan will be going over how to establish a framework for a virtual currency that will be backed by the reserve bank (these new digital currencies are referred to as CBDCs). They are expected to use the findings obtained from a technical study that the the Bank of Japan carried out for two years.
The appointment of the expert panel is coinciding with the start of a virtual yen pilot that includes the BOJ, various financial institutions as well as private-industry entities.
BOJ representatives stated that they presently have no definitive plans to actually issue a virtual currency. It’s now expected to take some time to address the different legal and framework issues required for such a project.
The ministry also noted that they intend to take into consideration feedback from the panel and potentially move forward with issuing a virtual yen.
Reserve banks across Europe, the US, as well as China are currently determining the feasibility of transacting with virtual currencies. They may be used in the same manner as banknotes and coins.
The potential implications of virtual currencies began to gain attention when US technology firm Meta revealed several years back that it would look into introducing its own digital currency.
Since that time, however, regulatory authorities expressed serious concerns that it might be used for engaging in illicit activities such as money laundering and could even have an adverse impact on monetary policies.
Meta eventually decided to give up on these plans.
Meanwhile, China is widely considered a leader when it comes to launching a virtual currency. A virtual yuan was introduced on a trial basis at the Beijing Olympics back in February 2022.
The US Federal Reserve also introduced its initial report on a digital dollar last year. And the European Central Bank is considering whether it would be a good idea to launch a digital euro.