Japan is gearing up to innovate and introduce robust payment systems as its economy gradually becomes cashless.
Bank of Japan’s (BOJ) Executive Director Kazushige Kamiyama said that while the country does not have any firm stance on CBDCs yet, it must develop other payment options as society becomes increasingly cashless.
According to an article published on 4 June 2025 by Reuters, Kamiyama said that while banknotes are still in high circulation in Japan, physical currency could see a steep decline in use going forward as Japan rapidly digitalises.
“As such, Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, and accessible universally while being safe and resilient,” he said.
He further explained that the government and the parliament will decide the issuance of CBDCs, and that they have not made any decisions so far regarding this matter.
BOJ Says No CBDC Plan Yet, But Pushes Digital Payments Innovation
Japan won’t issue a digital yen for now, but BOJ urges upgrades to settlement systems in a cashless era.
Move follows global CBDC debate reignited by Trump’s digital dollar ban. pic.twitter.com/THkDn2QQGD
— PiQ (@PiQSuite) June 4, 2025
However, the country’s central bank has conducted experiments and exchanged views with private firms on a Digital Yen, which could launch if the country decides to issue CBDCs.
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Asia Seems to be Leading the CBDC Charge
The buzz around CBDCs seems to ebb and flow and was largely subdued after President Trump banned work on CBDCs in the US. However, they seem to be making a comeback in Asia, at least.
Several Asian countries have had success in their CBDC tests and pilot projects. India’s CBDC pilot programme, for example, has had success in providing tenant farmers in the country with direct agricultural loans.
Furthermore, the Reserve Bank of India (RBI) is considering a cross-border CBDC pilot as E-Rupee circulation has crossed Rs. 1016 crore (over $118 million) from Rs. 232 crore (approximately $27 million) in 2024. It is also considering entering into multilateral CBDC initiatives through the Bank of International Settlements (BIS) innovation hub.
Moreover, the RBI is mulling expanding the use cases and scope of both e-rupee retail and e-rupee wholesale pilots. Plans are in place to improve the technical aspects of the aggregator framework to further enhance transparency, convenience and efficiency.
Other Asian countries are warming up to CBDCs as well. South Korea, for instance, is test piloting two CBDC projects: Project Hangang for domestic tokenised deposits and Project Agorá for cross-border payments involving multiple banks and institutions.
Interestingly, Bank of Korea’s Governor, Rhee Chang-yong, personally visited the nation’s six largest banks to advocate for the role of wholesale CBDCs after the bank’s announcement of plans to develop a joint stablecoin, highlighting a potential rivalry between public and private currency efforts.
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Asia’s Cashless Payment Transition
Driven by technological advancements, changing consumer behaviour and government initiatives, Asia is rapidly transitioning into a cashless society. The adoption of the Unified Payment System in India is underscored by the network processing over 131 billion transactions by the fiscal year 2023.
China’s Alipay and WeChat Pay account for over 1 billion users. Furthermore, cash transactions in China are expected to fall to just 3% by 2027. Beyond these Asian giants, other Southeast Asian countries like Thailand and Singapore have embraced cashless payments.
They have developed interoperable systems such as PromptPay and PayNow to enable cross-border transactions and reduce their dependence on Western credit card networks.
Notably, the proliferation of smartphones has been a catalyst for this transformation, especially in regions with previously low banking penetration.
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Key Takeaways
Japan has not yet decided its stance on CBDC but has conducted experiments with a Digital Yen
Asian countries like India and South Korea are leading the CBDC charge
Asia is rapidly becoming a cashless payment society led by India and China
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