BOJ's Digital Currency Experiment Enters 2nd Stage

Economy

Tokyo, May 8 (Jiji Press)--The Bank of Japan's experiment with a central bank digital currency has entered its second stage that focuses on restrictions on holdings and transactions.

In the first stage, completed in March, the BOJ checked issues related to the basic functions of a CBDC, including its issuance, withdrawal from financial institutions and transfers between them.

The second stage that started in April involves ways to prevent a shift of funds from bank deposits to a CBDC from threatening financial system stability.

Specifically, the BOJ is examining restrictions on the maximum amount of a CBDC that a person can hold and that can be transferred at one time. Issues related to holders of multiple CBDC accounts at different financial institutions will also be studied.

The BOJ plans to complete the second stage in March next year. It plans to conduct a pilot test involving the participation of consumers and businesses in the future.

[Copyright The Jiji Press, Ltd.]

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