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The central banks of Japan and Russia are advancing in the developmentof their CBDCs

More than a hundred central banks around the world are banking on the digitization of their fiat currencies via CBDCs.

Japan and Russia are advancing in the development of their CBDCs

The Central Bank of Japan will begin the testing phase of its virtual currency next April. Japan’s CBDC has been developed as the “digital yen” since the second quarter of 2021.

After passing the Proof of Concept (PoC) phase, the Japanese central bank is ready to launch a pilot testing program that will allow it to assess the technical feasibility of the digital currency.

The digital yen pilot test will be conducted with various equipment, although the CBDC will not be used for actual transactions between users and merchants at this time. The Central Bank of Japan will extend its CBDC pilot program from April, to discuss the results to make a decision on whether or not to issue the digital yen.

On the other hand, the Central Bank of Russia also plans to launch a pilot testing program for its CBDC from April 1. Unlike Japan, the Russian central entity will use the digital ruble as a means of personal and business payment during the pilot test phase.

So far, more than 100 countries around the world are developing a CBDC digital currency to optimize their systems and facilitate payments and other financial services.

Japan advances in the design of the digital yen

In a statement released this week, the Central Bank of Japan said it is developing an integrated system comprising the central banking system and intermediary network systems to expand CBDC testing, which until now has been carried out on a regular basis internally. .

Japan will also create a forum that will be exclusively dedicated to discussing and exploring all issues related to the issuance and use of a commercial-grade CBDC.

The central bank wants to develop retail payments as the primary focus of the digital yen. Offline payments, integration of the Japanese CBDC with external systems, among other things, will also be explored.

Scope of the Central Bank of Japan's new pilot program at its CBDC
Scope of the Central Bank of Japan’s new pilot program at its CBDC

So far, Japan has indicated that the development of a digital currency for the yen only seeks to respond to the changes that come with the growth and expansion of the crypto industry. On several occasions, the country’s Central Bank has indicated that it is in no rush to issue a CBDC.

The digital rouble, Russia’s plan to expand its financial infrastructure

From Russia, the first deputy governor of the Central Bank, Olga Skorobogatova, confirmed that the tests of the digital ruble will start on April 1. The tests to be carried out involve individuals, commercial and service companies, according to Skorobogatova.

The goal of the Central Bank of Russia with the implementation of this test pilot is to use its digital currency in transfers, operations and payments for goods and services in the real world. So far, the bank has confirmed that 13 Russian banks will participate in the new CBDC pilot.

The launch of this pilot comes after the presentation of the draft law on the issuance and use of the digital ruble in the State Duma at the end of December. The aforementioned bill aims to encourage the implementation of new digital technologies to develop a CBDC digital currency to strengthen the country’s payment and financial infrastructure.

Countries developing their own CBDCs

More than 100 countries around the world are working to develop their own central bank digital currencies. Among them are China, USA, UK, Ukraine, Jamaica, Brazil, France, Spain, Bahamas and many more.

Recently, Pakistan, Indonesia, and Canada have also expressed interest in creating digital currency as the future of payments.

In August last year, the Colombian government announced its intention to develop a CBDC as a strategy to combat tax evasion. The banks that make up the Central African region also see CBDCs as an alternative to strengthen financial inclusion and modernize their payment structures and systems.

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