Latest news with #CBDCs
Yahoo
a day ago
- Business
- Yahoo
Japan must pursue payment innovation as society becomes cash-less, BOJ official says
By Leika Kihara TOKYO (Reuters) -Japan currently has no plan to issue a central bank digital currency (CBDC) but must continue innovating its payment and settlement system in an increasingly cash-less society, a senior central bank official said on Wednesday. Although banknote issuance remains high in Japan, usage of notes could fall significantly in the future amid rapid digitalisation, said Bank of Japan (BOJ) Executive Director Kazushige Kamiyama. "As such, Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, accessible universally, while being safe and resilient," he said in a speech. While the BOJ currently has no plan to issue a CBDC, it must keep up efforts to enhance the safety and efficiency of Japan's payment and settlement system, Kamiyama said in a meeting with private firms on a pilot programme for developing a digital yen. The BOJ has said no decision has been made yet on whether Japan will actually issue a CBDC, which must be made by the government and parliament. But the central bank has been conducting experiments and exchanging views with private firms on a digital yen, to be ready in case Japan decides to issue a CBDC. CBDCs are back in the spotlight after U.S. President Donald Trump banned work on a digital dollar in one of his first moves after regaining power in January.
Yahoo
a day ago
- Business
- Yahoo
Japan must pursue payment innovation as society becomes cash-less, BOJ official says
By Leika Kihara TOKYO (Reuters) -Japan currently has no plan to issue a central bank digital currency (CBDC) but must continue innovating its payment and settlement system in an increasingly cash-less society, a senior central bank official said on Wednesday. Although banknote issuance remains high in Japan, usage of notes could fall significantly in the future amid rapid digitalisation, said Bank of Japan (BOJ) Executive Director Kazushige Kamiyama. "As such, Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, accessible universally, while being safe and resilient," he said in a speech. While the BOJ currently has no plan to issue a CBDC, it must keep up efforts to enhance the safety and efficiency of Japan's payment and settlement system, Kamiyama said in a meeting with private firms on a pilot programme for developing a digital yen. The BOJ has said no decision has been made yet on whether Japan will actually issue a CBDC, which must be made by the government and parliament. But the central bank has been conducting experiments and exchanging views with private firms on a digital yen, to be ready in case Japan decides to issue a CBDC. CBDCs are back in the spotlight after U.S. President Donald Trump banned work on a digital dollar in one of his first moves after regaining power in January.
The Star
a day ago
- Business
- The Star
Japan must pursue payment innovation as society becomes cash-less, BOJ official says
Kazushige Kamiyama, Bank of Japan's head of payment and settlement systems department overseeing its research on digital currencies, speaks at an interview with Reuters in Tokyo, Japan, October 15, 2020. REUTERS/Takahiko Wada/File Photo TOKYO (Reuters) -Japan currently has no plan to issue a central bank digital currency (CBDC) but must continue innovating its payment and settlement system in an increasingly cash-less society, a senior central bank official said on Wednesday. Although banknote issuance remains high in Japan, usage of notes could fall significantly in the future amid rapid digitalisation, said Bank of Japan (BOJ) Executive Director Kazushige Kamiyama. "As such, Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, accessible universally, while being safe and resilient," he said in a speech. While the BOJ currently has no plan to issue a CBDC, it must keep up efforts to enhance the safety and efficiency of Japan's payment and settlement system, Kamiyama said in a meeting with private firms on a pilot programme for developing a digital yen. The BOJ has said no decision has been made yet on whether Japan will actually issue a CBDC, which must be made by the government and parliament. But the central bank has been conducting experiments and exchanging views with private firms on a digital yen, to be ready in case Japan decides to issue a CBDC. CBDCs are back in the spotlight after U.S. President Donald Trump banned work on a digital dollar in one of his first moves after regaining power in January. (Reporting by Leika Kihara; Editing by Kim Coghill)
Korea Herald
20-05-2025
- Business
- Korea Herald
BOK pilots digital currency, but what is it like to use?
Project Han River offers glimpse into Korea's cautious but strategic approach to central bank digital currency adoption Signaling a new chapter in digital finance, the Bank of Korea last month launched "Project Han River," a pilot program for its central bank digital currency, or CBDC. Running from April through June, the trial invites 100,000 individuals to test tokenized deposits, with roughly 60,000 participating as of Monday, according to the BOK. The Korea Herald also took part to see how the system works in practice. The first step involved opening a digital wallet through one of seven participating banks, KB Kookmin, Shinhan, Hana, Woori, NongHyup, IBK and BNK, via their mobile apps. After verifying a bank account and linking it to the wallet, users must transfer funds into the wallet, converting cash into tokenized deposits. Participants can hold up to 1 million won ($719) in digital tokens at a time. Usable, but not smooth Payments are currently accepted at a handful of merchants. This includes 7-Eleven, Kyobo Book Centre, Hanaro Mart and Ediya Coffee for in-store options and Hyundai Home Shopping and Ddangyo food delivery apps for online payments. We tested the system at a 7-Eleven in Seoul. At checkout, we opened the banking app, tapped the wallet tab, entered a password, selected the QR payment option, entered the password again and scanned the code. Though similar to other contactless payments, the process involved noticeably more steps, with minor lags and interface delays making the experience feel clunky. Online payments felt more intuitive, working much like other easy payment systems or digital wallets. Overall, while the experience was comparable to existing mobile payments, tokenized deposits felt less preferable due to small but persistent technical hurdles that are hard to ignore in an era of near-seamless digital finance. After the first phase ends in June, the BOK plans to conduct system maintenance before launching a second round of testing later this year. The next stage will introduce person-to-person transfers and expand the number of participating merchants. More for the system, than shoppers So why launch a CBDC at all, especially when digital payment tools are already fast and widespread? CBDCs are expected to benefit governments and the broader financial system more than individual users. Issued by the central bank, a CBDC is a digital version of cash built on blockchain. It is programmable and traceable, but unlike cryptocurrencies, it is fiat money: fully regulated and anchored to national stability. By digitizing transactions, CBDCs can lower costs, streamline transfers and expand financial access. They also allow governments to distribute emergency and social benefits more directly, avoiding the delays of cash and the complexities of working with financial institutions. For the central bank, the goal goes beyond convenience. The CBDC is seen as a way to future-proof the financial system by preserving access to sovereign money and reinforcing central bank authority in an increasingly digital world. Centralized oversight also boosts transparency and helps deter illicit activity. Internationally, CBDCs could streamline cross-border payments and reduce reliance on private financial networks, supporting closer monetary cooperation. Privacy fears and technical risks Still, the idea is not without pushback. Critics warn that a traceable, state-issued currency could enable financial surveillance or restrict how money is used. Since the launch of the pilot project, petitions opposing CBDC adoption have drawn more than 50,000 signatures on the National Assembly's public petition platform and have been submitted for parliamentary review. A BOK official overseeing the project downplayed privacy concerns, emphasizing that the current trial involves a wholesale model for interbank use. Unlike a retail CBDC, where the central bank issues tokens directly to individuals, the wholesale version issues CBDC to commercial banks. The banks then provide users with deposit tokens, keeping individual transaction data out of the central bank's reach. 'At this stage, the (central) Bank is focused solely on developing a wholesale CBDC system,' the official said. 'Even if a general-use CBDC were to be introduced, it would require far more work and discussion, given the complexity and sensitivity involved.' There are also concerns about systemic risk. A technical failure or cyberattack could disrupt the entire financial system, posing not only daily inconvenience but also national security threats. Digital push grows, but cash will stay Though CBDCs may take time to match the ease of today's digital wallets, Korea's pilot marks a key step toward digital currency — one that could reshape how money is stored, spent and distributed. Policymakers see it as a long-term upgrade to financial infrastructure and a potential shift in the nature of currency itself. The program has also sparked debate among policymakers and academics over how to regulate emerging forms of currency — not only CBDCs, but also private digital assets such as stablecoins and cryptocurrencies. As these assets grow, governments face mounting pressure to update legal frameworks and build public consensus on the future of money. The debate extends beyond Korea. While many countries are advancing CBDCs, the US has paused development, opting instead to back dollar-pegged stablecoins. Still, the BOK has made clear it has no plans to eliminate physical cash. 'The reason we can use various digital payment methods with confidence is because we trust they're backed by a centrally operated system, which allows conversion to cash at any time,' said BOK Deputy Governor Lee Jong-ryeol during a recent briefing. 'Maintaining that trust in the currency system is a core responsibility of the Bank,' he added, noting there are 'no plans to fully phase out physical cash.'
Business Mayor
20-05-2025
- Business
- Business Mayor
CBDCs and the future of money: A global shift towards sovereign digital currency
Central Bank Digital Currencies (CBDCs) have rapidly evolved from theoretical discussions into a tangible component of modern financial systems. Once confined to academic and policy circles, interest in CBDCs surged following the 2008 financial crisis and the emergence of cryptocurrencies like Bitcoin, which challenged conventional banking structures. A major catalyst came in 2019 with Facebook's announcement of the Libra project, prompting central banks to act swiftly to safeguard monetary sovereignty. Since then, CBDCs have emerged as a transformative innovation, with central banks across the globe embracing this evolution. While each country's path towards CBDC adoption varies based on its financial infrastructure, technological maturity and policy objectives, the overarching goal remains clear: to create a more inclusive, efficient and resilient monetary system for the digital age. For those new to the concept, understanding CBDCs begins with connecting it to familiar experiences. A CBDC is a digital form of a country's official currency, issued and regulated by its central bank. Unlike decentralised cryptocurrencies such as Bitcoin, CBDCs are government-backed digital fiat currencies, designed to serve as legal tender for everyday transactions. Think of it as digital cash: individuals could use it to buy groceries, pay for services, or send money instantly and securely just by using a smartphone. Unlike balances in mobile wallets like e-Sewa or funds held in bank accounts, CBDCs carry the full backing of the government. For users, this translates into a more reliable and accessible payment method, particularly beneficial in underserved or remote areas. By merging the convenience of digital payments with the security of central bank backing, CBDCs aim to democratise access to financial services. As the world becomes increasingly digitised with growing reliance on smartphones, online banking and mobile payments, central banks recognise the urgency of modernising money itself. The proliferation of digital wallets, cryptocurrencies and fintech platforms has reshaped public expectations around speed, security and accessibility in financial services. In response, countries are actively exploring and launching CBDCs to ensure that their national currencies remain relevant and effective in a digital-first world. Today, more than 130 countries representing over 95 per cent of global GDP are researching, developing, or piloting CBDCs. From China's digital yuan to India's e₹, nations are not merely adapting to change but leading it, seeking to build more resilient, inclusive and future-ready monetary ecosystems. Some countries have already taken significant steps. Nigeria, the Bahamas and Jamaica have fully launched their digital currencies. Meanwhile, the European Union and the United Kingdom are advancing their respective projects the digital euro and 'Britcoin'. Even the United States is conducting extensive research, though it has yet to formally commit to a national rollout. These efforts collectively underscore that CBDCs are not just a passing trend, but a cornerstone of the future financial architecture. International cooperation is also gaining momentum. Initiatives such as 'mBridge', led by the Bank for International Settlements, involve countries like China, the UAE and Thailand in piloting cross-border CBDC transactions. These collaborative ventures demonstrate CBDCs' potential not only to enhance domestic monetary systems but also to improve global financial integration and efficiency. Nepal, too, is embracing this digital transformation. The Nepal Rastra Bank (NRB) is actively working towards introducing a Central Bank Digital Currency, marking a significant step in modernising the nation's financial landscape. With technical support from the Bank for International Settlements, NRB has developed a CBDC prototype using the Hyperledger Fabric blockchain and completed a comprehensive feasibility study. A pilot launch is targeted for 2026, with the system designed to support both wholesale and retail transactions. The goal is to enhance financial inclusion, reduce dependency on physical cash and improve the transparency and efficiency of payments. Legal frameworks are currently being prepared to ensure secure and regulated implementation. If successfully executed, Nepal's CBDC initiative could play a pivotal role in creating a more inclusive and digitally empowered economy, while keeping pace with global financial trends. What's clear is that CBDCs are no longer just theoretical constructs, they are becoming a reality, shaping the next chapter of sovereign finance. However, the motivations behind CBDCs vary: advanced economies often focus on payment system modernisation and sovereignty over monetary policy, while developing nations see CBDCs as tools for expanding financial access, reducing cash dependency and boosting digital innovation. As more countries take concrete steps towards digital currencies, the global financial landscape is poised for a significant shift. Despite the existing challenges such as cybersecurity, privacy and infrastructure, the promise of CBDCs remains compelling: a secure, efficient and accessible monetary system tailored for the digital age. The transition to CBDCs is not merely a financial evolution, it is a defining transformation in the future of money.
