Japan as a country is still uncertain about whether it needs a digital currency backed by the central bank or not. However, the Bank of Japan still continues to work towards a digital Yen.
Recently, the Bank of Japan has gone ahead with a CBDC pilot with three selected megabanks. With this experiment, the central bank aims to run experiments related to the issuance of Digital Yen. According to available reports, the said experiments will start somewhere in 2023 (spring season).
During the trial, the Bank of Japan will work with some major banks to find and solve any issues related to the deposits/withdrawals of digital Yen. In addition, the trial will also test the offline functionality of digital Yen - This will be done by making payments without the internet.
For now, the central bank of Japan aims to continue its experiment for at least two more years. That's why experts believe that it might take until 2026 before Japan makes a final decision about the digital Yen.
If we look around the world, all the major economies are making progress towards their own CBDC initiates. In fact, China is already leading the world in the digital currency race.
Similarly, India is also reportedly working towards a digital ruppe project and plans to launch its own pilot project with few banks such as HSBC, Citi, and others.
However, there are also some countries such as Denmark that have totally ditched the idea of a digital currency. For them, the reasons for this are questionable value and difficulties for the different sectors.
It seems that within the next 5 to 10 years, we may see a paradigm shift on how currencies are issued and used. And one of the biggest change will be in the form of digital currencies issued by the central banks around the world.