The Bank of Japan is choosing to forge ahead with the design and eventual test of its CBDC despite the various issues plaguing the development. In a news report that was published by the local newspaper Nikkei, the premier bank has started plans to collaborate with several high-profile financial institutions to test the CBDC at its current design phase. The news mentioned that the bank has already drafted three banks that it will work with.
Bank of Japan wants to do a demo testing
This testing phase which should launch soon is a demo phase highlighting the way the official CBDC will operate when it eventually launches. As part of its collaboration, the banks are expected to solve all major issues relating to deposits and withdrawals in customer bank accounts.
The phase will also include testing the CBDC to determine its offline capabilities. Bank of Japan is trying to focus its CBDC to carry out payments without the internet. The Bank of Japan mentioned that it will experiment for the next two years before choosing if it wants to issue the CBDC or not after concluding the tests.
Countries are undecided about developing CBDCs
This news is coming off the back of several countries ramping up preparations to either create or develop their CBDC. While some countries have established an abridged version of an online CBDC, China is still leading the race to develop a full and working CBDC. Another bank in that bracket is the Reserve Bank of India. The bank has been working overtime with financial institutions across the country to fully design and develop its CBDC. The bank of New York has also announced that it will partner with several banks in the country to carry out a test on a potential CBDC which will last 12 weeks.
Although most banks of the world have been working on creating their CBDC, others have chosen to give up on their pursuit of creating theirs. Citing Denmark as an example, the country blamed several factors including difficulty for the private sector as a reason for dropping out. Other have also blamed the value and benefits to the countries for their exclusion from the project. However, there has been no central bank coming forward to say it won’t create a CBDC.
