In Japan, the digital currency project was repackaged due to lack of public interest

Central bank digital currencies (MNBC) are often touted as the future of fiat currencies … But will they be tailored to user needs? Not necessarily, according to Japan, which is discontinuing its MNBC project. What happened ?

The Japanese digital currency is suspended due to lack of public interest

The news went pretty unnoticed late last month, but it’s particularly symbolic. Japan stops its central bank digital currency (MNBC) project.. Recall that the possible crypto-yen was in an experimental phase since the beginning of 2021, with a second phase that began in April. Nothing surprising: the vast majority of countries in the world are at this stage testing solutions of this type.

But the land of the rising sun he is the first to officially depart from it, after these test phases. The Central Bank believes that it is not necessary for Japan to offer an MNBC. How come ? Simply because the existing solutions seem to him sufficient, since the Japanese are particularly attentive to digital means of payment.

👉 Go deeper – Digital central bank currencies (MNBC) – What are they and how do they work?

Japan is digital payment services

The Bank of Japan argues that the benefits of a central bank digital currency are redundant. Japanese people everyone already has access to banking servicess, financial inclusion is not a particular problem for the country. Furthermore, residents already use many digital payment solutions from the private sector. They use it daily to purchase goods and services.

Where then would a MNBC fit, which should be “just” a digital transcript of the yen, which would operate outside the banks? Furthermore, the Japanese, like the French, they are particularly accustomed to the species. 20% of the country’s GDP would therefore come from cash exchange rates.

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A problem that goes beyond Japan?

The Bank of Japan has made it clear that it will continue to experiment with digital payments, but for now this digital currency project is really buried. It is a problem that echoes in every case to broader questions within the crypto ecosystem.

Cryptocurrencies are often criticized for solving problems that don’t exist. Practice shows, however, that in countries where inflation reigns and where fiduciary money and the central bank face a lack of confidence, cryptocurrencies are particularly used. This is obviously the case in Latin America, which has become the cradle of global adoption.

A country with a solid economy like Japan, with a largely banking population and that has access to a multitude of payment requests, so it doesn’t play in the same field. It is likely that these questions will then arise in other “big” economies, because as always, it is the uses and the market that will make their law.

👉 On the same topic – The Governor of the Banque de France shares his vision of a European MNBC

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Source: Asia Times

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