The Central Bank of Japan decided to hold its development and launch work for Central Bank Digital Currency (CBDCs) because of a lack of interest by the citizens.
The concept of Central Bank Digital Currency (CBDCs) grabbed huge traction among the dominant central bank authorities because of the popularity & adoption of the private sector-backed stablecoin. The main aim to introduce CBDCs in the payment system is to bring advancement in the traditional payment methods, where people can easily handle their fund’s transactions.
The Bank of Japan (BOJ) is also in the race of CBDC development. In 2021, BOJ tested the technical feasibility of the issuance of a CBDC. In April of this year, BOJ was in the second phase of the CBDC-associated experiment. At this phase, we can’t expect that the Japan Central Bank may drop its plan of CBDC introduction but it suspended its plan and probably it may resume its work on CBDC in the future.
The main reason to suspend the plan of CBDC introduction is lack of interest. According to the BOJ, the Japanese are currently adaptive & addicted to the traditional payment methods like credit/debit cards and traditional net banking & they are not much interested in going with CBDC-like alternative options, as per a report by Asia Times Sayuri Shirai.
The report noted that development and advancement in financial tools and systems are majorly required for the big businesses but so far no one sector showed it need to see improvement in this system.
On the other hand, the local population is highly dependent on the payment system provided by private companies, like digital wallets. The majority of the citizens found that private payment services are better for them to choose to pay for the online & local services easily.
The whole crypto industry sees this situation as dramatic because no one expects that Japan may drag its feet from the CBDC adoption. At present, almost 90% of Central Banks are either studying or developing CBDC, to bring advancement to their payment system.