After RBI's Digital Rupee pilot, Bank of Japan working towards creating digital Yen

On 1 December, the Reserve Bank of India (RBI) launched the first retail digital Rupee (e-Rupee) pilot. A total of eight banks had been picked by the RBI for the same- ICICI Bank, Yes Bank, State Bank of India, IDFC First Bank, Union Bank of India, HDFC Bank, Bank of Baroda, Kotak Mahindra Bank. The move comes a month after the central bank rolled out a wholesale Central Bank of Digital Currency (CBDC) pilot to trade government bonds. While India piloted its digital rupee CBDC last week, the Bank of Japan (BoJ) is now working towards creating digital Yen. Japan is collaborating with three large banks, which includes local banks, for conducting a Central Bank of Digital Currency (CBDC) project as reported last month by the news agency Nikkei. By collaborating with major private banks and other national organisations, the main motive of the Bank of Japan would be handling issues regarding customer deposits and withdrawals. But not all people are convinced. Sankhanath Bandyopadhyay, economist, and CBDC expert told FE Blockchain that innovation and establishment of a responsible and transparent system cannot take place in a centralised system. He further added that decentralisation and blockchain are needed for CBDC’s success. Japan’s central bank is going to experiment with CBDC for two consecutive years, which will include the offline functionality of Japan’s CBDC. The experiment will mainly focus on payments without the Internet. He also noted that all countries are planning to launch CBDC. According to Bandyopadhyay, each country has its own reason for staying away from it. He went on to add that Finland had talked about adopting a digital Euro in August after it had dropped its CBDC project. According to the FinTech Department of RBI, CBDC is a digital form of currency note which is issued by a central bank. According to reports, the efficiency of cross-border payments can be enhanced by the RBI’s CBDC. It can also offer an alternative to the corresponding banks. While the issuance of CBDC is being explored by most of the central banks across the world, the key intentions for its issuance vary on the basis of each country’s unique needs. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.