{"id":138341,"date":"2020-07-04T13:00:35","date_gmt":"2020-07-04T12:00:35","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=138341"},"modified":"2020-07-04T10:22:49","modified_gmt":"2020-07-04T09:22:49","slug":"coronavirus-pushes-bitcoin-friendly-japan-to-begin-digital-yen-trials","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/coronavirus-pushes-bitcoin-friendly-japan-to-begin-digital-yen-trials\/","title":{"rendered":"Coronavirus pushes Bitcoin-friendly Japan to begin \u201cDigital Yen\u201d trials"},"content":{"rendered":"

The East Asian superpowers are battling it out, this time with blockchain and digital currencies as a focus.<\/span><\/p>\n

ZDNet<\/span><\/i> reported<\/a> Friday that Japan has quietly begun digital yen experiments in an effort to build out its CBDC capabilities.<\/span><\/p>\n

The move comes as China\u2019s digital yuan<\/a> is seeing explosive development and South Korea has assembled a team<\/a> to spearhead its digital won.<\/span><\/p>\n

Legal implications before digital yen<\/strong><\/h2>\n

Reports state technical challenges for a state-wide deployment are being carefully considered. Legal implications form the bulk of research, and Japan wants a \u201cconcrete footing\u201d before issuing a digital currency.<\/span><\/p>\n

Heading the study is the Bank of Japan(BoJ), the country\u2019s central bank <\/span>with an estimated<\/a><\/strong> $4.87 trillion under management.<\/span><\/p>\n

Last week, the bank issued its “Technical Hurdles for CBDC<\/a>” report, noting that upcoming experiments with a state-backed currency could provide an <\/span>alternative<\/span><\/i> to the \u201ctraditional\u201d Yen.<\/span><\/p>\n

The ongoing coronavirus pandemic has been singled out as a catalyst. BoJ believes traditional payment methods, such as cash and cards, rely on contact that may increase the risks of virus transmissions. To counter this, contactless methods like mobile, online, and digital currency payments may gain precedence.<\/span><\/p>\n

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Disinfecting cash as COVID transmissions a worry. Digital currency is touted as an alternative to prevent this. (Source: LA Times)<\/figcaption><\/figure>\n

Earlier this month a Japanese senator said cryptocurrencies \u201cwill be more important\u201d in a post-COVID world, as CryptoSlate <\/span>noted at the time<\/a><\/strong>.<\/span><\/p>\n

But don\u2019t expect to see digital yens going around soon. BoJ said the project remains in a nascent stage, for now, one where the groundwork and long-term aspects are carefully weighed out.<\/span><\/p>\n

Two considerations<\/h2>\n

Two specific research areas have been identified as the main focus\u2014resilence and ease-of-access. The former deals with how a digital framework could survive efficiently in times of disasters.\u00a0<\/span><\/p>\n

This is important, as Japan is one of the most earthquake-prone countries globally which causes disruption of several economic systems for days on end. If the power is out, there are no outlets to access online payments, a feature that cash provides for citizens.<\/span><\/p>\n

Earthquake concerns are significant, with even bullet trains being upgraded for the event. A tweet from June 2 shows:<\/p>\n

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Japan's latest record-breaking bullet train doesn't only run faster and smoother — it's also able to transport passengers to safety in the event of an earthquake. https:\/\/t.co\/O18Lc3I25F<\/a><\/p>\n

— CNN International (@cnni) July 2, 2020<\/a><\/p><\/blockquote>\n