For years, Toyota was leading the automotive industry with its eco-friendly vehicles. Its cars like the Prius and crossovers give the company a fuel-efficiency edge over some of its competition. But when the world was transitioning towards electric vehicles (EVs), Toyota didn’t pick up on the hint — for years.

Now, when it revealed plans to move to zero-emission vehicle sales in Western Europe by 2035, it is seen more as a compliance step due to impending legislation in certain markets.

While the announcement is a step forward for Toyota, the automaker has been significantly slower to move into purely battery-powered EVs than its competitors, relying heavily on hybrid technology instead. In fact, it wasn’t until last month until the Japanese carmaker announced details about its first mass-produced EV that is due for its release next year.

If anything, Toyota has been hinting a rather conservative and cautious tone when it comes to its approach towards battery-electric models. During the recent media event in Brussels, Toyota Europe outlined its plan for a 100% CO2 reduction in all-new vehicle sales in the Western Europe market by 2035. 

For starters, the goal will be preceded by a sales mix of at least 50% zero-emission vehicles (ZEVs) in the region by 2030, signaling that internal combustion engines will play a significant role for quite some time. 

It is overall a part of Toyota Motor Europe’s 14-year plan. The company is even willing to increase its EV production capacity should “customer demand go even higher.” Toyota Motor Europe’s president & CEO Matt Harrison said. To be fair, Seems like an admirable goal, albeit a little slow. However, as Electrek puts it, “Toyota is simply doing the bare minimum to continue to sell vehicles in that market.”

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For context, just in July this year, the European Green Deal was revealed whereby the EU proposed an entire package of climate proposals, including reductions of new car emissions by 55% by 2030, and 100% by 2035. That said, Toyota’s goals are aligning with that of Europe’s because it has to, not because it wants to.

The Sierra Club’s Clean Transportation for All campaign’s acting director Katherine García told Autoweek that  “Toyota’s announcement about delivering electric vehicles in Europe does little to speed up its molasses-slow electrification strategy in the United States. Why is Toyota ignoring its largest market?”

Given how the automaker did not announce a phase-out date for hybrids and PHEVs in Europe shows that the pace of EV adoption among the EU states might be unpredictable. Otherwise, Toyota’s long-term plans are generally in line with those of other automakers that have set some fairly concrete phase-out plans for internal combustion engines.

The post Toyota is committing to 100% zero-emission sales in Europe by 2035 appeared first on Tech Wire Asia.

In April this year, the Bank of Japan (BoJ) launched the first phase of its central bank digital currency (CBDC) experiment. Although the country’s central bank has no definite plans to issue a CBDC anytime soon, it’s executive director Shinichi Uchida did say that if BoJ were to do so, the digital currency would need to co-exist with private-sector payment services.

The private sector were fast enough to respond to the idea, with a consortium of approximately 70 Japanese firms and three of the country’s mega-banks now planning to test out a yen-based digital currency, tentatively known as “DCJPY”, in the coming months.

Post trial period, the consortium has an end goal of launching the DCJPY by fiscal 2022. A report by Reuters noted that the digital currency will be backed by bank deposits and will use a common platform to speed up large-scale fund transfers and settlement among companies.

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The consortium includes Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc, Sumitomo Mitsui Financial Group Inc, and other lenders such as Japan Post Bank Co Ltd, brokerages and insurers, as well as non-financial firms such as Nippon Telegraph & Telephone Corp, Kansai Electric Power Co Inc and East Japan Railway Co. Some will even participate in experiments to gauge such a currency’s use in industries ranging from energy to retail.

The group have apparently been meeting regularly since last year to study ways to build a common settlement infrastructure for digital payments. Although the three mega-banks have each introduced their own digital payment systems, it has lagged efforts by technology firms such as PayPay, according to Reuters.

To recall, last year, BoJ published a CBDC document in which it outlined three stages of trials, including two phases for Proofs of Concept followed by a pilot. Japan’s objectives have been a little different from most countries because of the heavy use of cash in retail payments.

Although the cash usage is still high, the BoJ is keen to be prepared for change. As per data available, around 82% of payments involve the use of cash, and whilst the pandemic has encouraged the cash-loving Japanese to move away from physical money, the country’s fast-ageing population are resisting change.

According to a report by Reuters, Japan’s currency in circulation and bank deposits even rose at a record pace during the pandemic, which prompted businesses and households to continue hoarding cash. 

Even the BoJ reckons that for the time being, it is unlikely that the cash in circulation would drop significantly. “If, however, this should become the case, and if private digital money will not substitute for the functions of cash sufficiently, the Bank might provide general purpose CBDC as a payment instrument alongside cash. As long as there is public demand for cash, the Bank will stay committed to supplying it,” said the bank.

In short, even without the decline in cash circulation, if CBDC is needed from the viewpoint of enhancing the stability and efficiency of the overall payment and settlement systems, the central bank would  only issue CBDC in order to support private payment services.

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It has been more than 18 months since the pandemic struck, leading to a global shortage of semiconductor chips. Ever since then, numerous countermeasures and collaborations were announced between industry players in order for supply to meet the growing demand.

The latest talk of the town is a possible collaboration between the world’s largest contract chipmaker, Taiwan’s TSMC, and Japan’s Sony Group Corp.

Apparently, TSMC (Taiwan Semiconductor Manufacturing Co.) and Sony are considering building a chip factory in Japan together.

First reported by Nikkei Asia, it is also said that the Japanese government is ready to cover up to half of the US$7.15 billion investment. The new factory by both the companies would be built on Sony-owned land in Kumamoto Prefecture.

The goal, according to the outlet’s anonymous sources, would be to have the US$7 billion construction project finished in time for the factory to be fully operational by 2024.

This collaboration seems timely, as the ongoing chip shortage has prevented many companies from meeting industry demand. In response, companies and countries around the world have been scrambling to become self-sufficient.

According to the report, “the factory will make semiconductors used in camera image sensors, as well as chips for automobiles and other products, and is slated to go into operation by 2024”, adding that the factory would be TSMC’s first chip production operation in Japan.

The factory will have an expected output of 40,000 wafers per month based on the 28nm node.

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With manufacturing bases in Kumamoto and Nagasaki prefectures, Sony currently controls half of the world’s market share for sensors used in smartphones and cameras. The sensors are manufactured in-house, but the semiconductors that process images are procured from third parties, including TSMC.

Nikkei Asia even noted that Japan’s top auto parts maker Denso is considering being a part of the project by setting up equipment at the site — “The Toyota Motor group member seeks stable supplies of chips used in its auto parts.”

However, in exchange for subsidizing the project, the Japanese government “will seek a commitment” that supplies of these chips will prioritize the Japanese market’s needs first.

To recall, in April this year, TSMC CEO CC Wei expected chip supplies to remain constrained, at least until late 2022. CEO Lisa Su, of another major player AMD,  said in September that she believed supplies would improve by next year.

According to Omdia, 28nm semiconductor chips are slated to see strong growth, at least up to 2025, due to their good value for money, as well as applications in various industrial and consumer products such as OLED TVs, IoT devices, and edge computing.

However, whilst it seems that measures like this will ease the global semiconductor shortage now, the IDC market research group reckons there could be an oversupply problem by 2023.

The probable upside to that, however, is that consumers are likely to enjoy cheaper products that utilize these chips, and hopefully, this would result in cheaper costs for businesses and enterprises at large to drive higher cloud and edge uptake.

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One week ago, just before the opening of the 2020 Summer Olympics in Tokyo, Japan, the US intelligence service sent out a private industry notification. The document warned about the possibilities of a number of cyberattacks during the Japan Olympics including distributed denial of service (DDoS) attacks, ransomware, social engineering, phishing campaigns, or insider threats.

Such attacks could try to block or disrupt live broadcasts of the event, steal and possibly hack and leak or hold hostage sensitive data, or attack and impact public or private digital infrastructure supporting the Olympics, according to the agency.

“Malicious activity could disrupt multiple functions, including media broadcasting environments, hospitality, transit, ticketing, or security. The FBI to date is not aware of any specific cyber threat against these Olympics, but encourages partners to remain vigilant and maintain best practices in their network and digital environments,” the notice added.

Although the FBI to date is not aware of any specific cyber threat against these Olympics, the agency, however, encourages “partners to remain vigilant and maintain best practices in their network and digital environments.” The warning came after Japanese tech giant Fujitsu, which is supplying a number of services for the Olympics, was targeted by a major cyberattack earlier this year.

Fujitsu suffered a data breach from several of its corporate and government clients, including the Tokyo 2020 Organizing Committee and the Japanese Ministry of Land, Infrastructure, Transport, and Tourism.

Members of the organizing committee of the Olympics were also targeted in a separate attack in June 2021, with data including the names and affiliations of the individuals, who were linked with roughly one hundred organizations that are involved in hosting the sporting event, leaked online.

Japan is prepared for the Olympics — and cyber threats

Since at least the 2004 Athens Olympic Games, cybersecurity has been a growing concern for Olympic host nations and the International Olympic Committee. Learning from the past, Japan decided to be proactive. Last October, the International Olympic Committee (IOC) identified cybersecurity as a priority area and announced plans to heavily invest to provide the best cyber-secure environment for the games. 

However, the IOC noted that they would not be disclosing the specific details of their cybersecurity plan due to the nature of the topic. Given the increase in cyber threats and attacks in recent years, Japan started a bilateral collaboration with new countries and strengthened its current partnerships. For example, Japan has worked with the U.S. Department of Homeland Security on how to improve its cybersecurity in preparation for Tokyo 2020.

Even the country’s leading energy utility has also partnered with the Israel Electric Corporation (IEC), Israel’s electricity provider, to manage cybersecurity concerns to critical infrastructure during the Olympics.

On top of all that, a review of Japan’s cybersecurity strategy for Tokyo 2020 showed that Japan has limited cybersecurity professionals with only 28% of IT professionals working in-house. 

This is significantly lower than the 65.4% in the United States, 61.4% in Germany, and 53.9% in the United Kingdom. To solve this problem, Japan trained 220 ethical hackers earlier this year in hopes to create a more cyber secure Tokyo 2020.

The post Is Japan ready to face mounting cyber threats during the Olympics? appeared first on Tech Wire Asia.

In a bilateral meeting with Bangladeshi State Minister for ICT Zunaid Ahmed Palak, Japanese ambassador Ito Naoki expressed that Japan is interested in building smart cities in the country, reported Dhaka-based The Business Standard.

Smart city projects a natural progression

According to Naoki, Japan has contributed in many areas including infrastructure development in Bangladesh. There are currently over 300 Japanese companies operating in the country – triple the number 10 years ago.

Japan is the largest Asian export market for Bangladesh with shipments amounting to about $1.3 billion. As such, Japanese companies are ready to expand their business there, in spite of challenges brought on by the Covid-19 pandemic.

Naoki emphasized the importance of collaboration to further expand cooperation between the two countries through the development of strategic partnerships between Japan and Bangladesh.

“ICT is now the main driving force of the economy. The Japan International Co-operative Agency (JICA) can further develop and enrich the master plan for Bangladesh 2041 by assisting in technology-based human resource development.”, he added.

Palak presented some proposals to the ambassador for collaboration to boost the country’s IT sector. Some areas Bangladesh is exploring include cybersecurity, e-Waste management, and e-Governance.

“We have already sent a proposal to ERD to set up a Bangladesh-Japan ICT University to meet the requirements for performing Industrial Revolution 4.0 and Society 5.0,” added Palak.

Japan’s smart city efforts in ASEAN

Last year, Nikkei Asia reported that Japan has set aside a 250 billion yen (US$ 2.4 billion) fund to support Smart City projects by Japanese companies and improve decarbonization measures in 26 cities across ASEAN.

Tokyo expected these 26 cities to present their Smart City development plans at the end of last year, with eligible projects to be picked by March this year. It also expects Japanese companies to have basic plans for these cities with feasibility studies conducted. However, at the time of writing, its progress is still unclear.

The fund will comprise approximately 50 billion yen (US$ 451,000) from the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN), a government fund for infrastructure development, and a line of credit worth 200 billion yen (US$ 1.8 billion) from the Japan Bank for International Cooperation (JBIC).

JOIN will consider forming joint ventures (JV) with local and Japanese companies in ASEAN, whereas JBIC will extend the credit line to environmental programs. The latter include initiatives for reducing greenhouse gas emissions, increasing the use of renewable energy, and preventing air and water pollution.

Japanese companies in ASEAN include Tokyu in the Bin Duongh Province in Vietnam, whereas a consortium of Yokohama-based companies is involved in a project in the Thai province of Chonburi. Trading houses Sojitz and Mitsubishi are separately promoting the development of smart cities near Jakarta.

Japan’s rivalry with other Asian Tigers intensifies

This move puts it in competition with other countries from Greater Asia – namely, China and South Korea, as well as other foreign rivals.

Earlier this year, South Korea announced a support package for overseas smart-city projects. Over 20 countries applied, and 11 were approved, including six ASEAN member countries.

The South Korean government is also preparing a fund of 400 billion won (US$ 366 million) to help its own companies acquire smart-city projects. 

While projects in Kota Kinabalu, Malaysia, and the Laotian capital of Vientiane are eligible for South Korean support, the cities are also among those where Japanese companies are aiming to expand their business.

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Announced in July 2020, the new 100% electric model was initially supposed to go on sale in Japan from mid-2021, before arriving in Europe, North America, and China by the end of the year. But in a press release on 4 June, Nissan said customers in Japan could now order the limited-edition Ariya B6 model for “this winter,” with no set date for those in other markets.

A Nissan spokeswoman confirmed that the semiconductor shortage affecting carmakers around the world was hampering the Ariya rollout. “We have been facing various industry challenges, including semiconductor shortage, and our priority is to ensure that we deliver the highly advanced all-new model[…] to customers with the highest level of quality and care,” she told AFP. “And to make sure that those things are done, we have delayed the sales in our area.”

Adoption and sales of electric vehicles have been growing steadily in recent years, with China in particular seeing a significant upward trajectory in take-up of the clean energy vehicles, which observers hope will help push towards sustainability and zero-emission targets for both the country and the consumer transport sector. Market leader Tesla is competing in a competitive marketplace on the mainland, with a slew of local electric vehicle competitors also eating up market share.

The Ariya model is particularly important for Nissan, which sees it as key to opening a “new chapter” for the firm, according to its director general Makoto Uchida. Ariya will be the troubled automaker’s first 100% electric vehicle targeting the general car market since the Leaf debuted a decade ago.

Nissan was struggling even before the pandemic, and was rocked by the arrest and subsequent escape of its former chief Carlos Ghosn, currently a fugitive in Lebanon. But the coronavirus crisis only deepened its woes, pushing it deeper into the red.

Last month the Japanese carmaker trimmed its annual net loss, but warned its outlook remained clouded by the chip shortage. Nissan has been a pioneer in electric vehicles since its Leaf model was released over a decade ago. But the struggling firm – still trying to recover from the devastating reputational damage caused by the sudden departure of now fugitive tycoon Ghosn – desperately needs a new hit.

Semiconductors are in short supply, thanks in part to increased demand due to a surge in home electronics purchases during the pandemic. The industry has also been hit by several production setbacks, including a fire at a producer in Japan.

JAPAN TO CO-DEVELOP CUTTING-EDGE CHIP TECH WITH TAIWAN’S TSMC

Joe Devanesan | 4 June, 2021

A chip shortage, also referred to as semiconductor shortage or chip famine, is a phenomenon in the integrated circuit industry, when demand for silicon chips outstrips supply. The origin of this particular shortage has its roots in the global pandemic. The lockdowns ushered in to combat the Covid-19 outbreak caused disruptions in supply chains and logistics systems chip suppliers depended upon to maintain production, while at the same time, as people began spending much more time at home, there was a boom in demand for consumer electronics.

© Agence France-Presse

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Announced in July 2020, the new 100% electric model was initially supposed to go on sale in Japan from mid-2021, before arriving in Europe, North America, and China by the end of the year. But in a press release on 4 June, Nissan said customers in Japan could now order the limited-edition Ariya B6 model for “this winter,” with no set date for those in other markets.

A Nissan spokeswoman confirmed that the semiconductor shortage affecting carmakers around the world was hampering the Ariya rollout. “We have been facing various industry challenges, including semiconductor shortage, and our priority is to ensure that we deliver the highly advanced all-new model[…] to customers with the highest level of quality and care,” she told AFP. “And to make sure that those things are done, we have delayed the sales in our area.”

Adoption and sales of electric vehicles have been growing steadily in recent years, with China in particular seeing a significant upward trajectory in take-up of the clean energy vehicles, which observers hope will help push towards sustainability and zero-emission targets for both the country and the consumer transport sector. Market leader Tesla is competing in a competitive marketplace on the mainland, with a slew of local electric vehicle competitors also eating up market share.

The Ariya model is particularly important for Nissan, which sees it as key to opening a “new chapter” for the firm, according to its director general Makoto Uchida. Ariya will be the troubled automaker’s first 100% electric vehicle targeting the general car market since the Leaf debuted a decade ago.

Nissan was struggling even before the pandemic, and was rocked by the arrest and subsequent escape of its former chief Carlos Ghosn, currently a fugitive in Lebanon. But the coronavirus crisis only deepened its woes, pushing it deeper into the red.

Last month the Japanese carmaker trimmed its annual net loss, but warned its outlook remained clouded by the chip shortage. Nissan has been a pioneer in electric vehicles since its Leaf model was released over a decade ago. But the struggling firm – still trying to recover from the devastating reputational damage caused by the sudden departure of now fugitive tycoon Ghosn – desperately needs a new hit.

Semiconductors are in short supply, thanks in part to increased demand due to a surge in home electronics purchases during the pandemic. The industry has also been hit by several production setbacks, including a fire at a producer in Japan.

JAPAN TO CO-DEVELOP CUTTING-EDGE CHIP TECH WITH TAIWAN’S TSMC

Joe Devanesan | 4 June, 2021

A chip shortage, also referred to as semiconductor shortage or chip famine, is a phenomenon in the integrated circuit industry, when demand for silicon chips outstrips supply. The origin of this particular shortage has its roots in the global pandemic. The lockdowns ushered in to combat the Covid-19 outbreak caused disruptions in supply chains and logistics systems chip suppliers depended upon to maintain production, while at the same time, as people began spending much more time at home, there was a boom in demand for consumer electronics.

© Agence France-Presse

The post Global chip shortage dents Nissan’s electric vehicle dreams appeared first on Tech Wire Asia.

The move comes as global industry grapples with a global semiconductor shortage that has hampered the manufacturing of numerous products, particularly autos. A forecast by the automotive and industrial practiceAlixPartners said the ongoing semiconductor shortage will cost the global automotive industry US$110 billion in lost revenues this year, up more than 80% from the consultancy’s late-January estimate of US$61 billion. The group also estimated that the production of 3.9 million vehicles will be lost in 2021 as a result of the shortage.

Around 20 Japanese companies will work with TSMC in the project worth 37 billion yen (approx. US$337 million), with the government paying just over half of that, an official from Tokyo’s Ministry of Economy, Trade and Industry told AFP on Tuesday. The research will focus in particular on tech for 3D chip assembly, allowing the creation of components that are more dense but still small.

A pandemic-fuelled surge in demand for home electronics that use semiconductors has throttled chip supplies – a crisis deepened by a US cold snap, a drought in Taiwan, and a fire at Japan’s Renesas manufacturer. Semiconductors are an essential part of modern tech from smartphones to games consoles and new cars, with the auto industry one of the hardest hit by the shortage.

Construction will begin this summer on research facilities at the National Institute of Advanced Industrial Science and Technology in Tsukuba, near Tokyo, the official said, with the project due to kick off in 2022. The Nikkei newspaper reports that among the Japanese companies that will be involved are chemicals firms Asahi Kasei, Mitsui Chemicals and Sumitomo Chemical, as well as electronic component maker Ibiden Co.

TSMC accounts for more than half of the world’s semiconductor foundry market in 2020 and this year, a variety of industries are scrambling for the company to resolve the semiconductor chip shortage in the global auto market, in consumer electronics, smartphones, and many others. The foundry had previously revealed that it has record levels of capital expenditure of up to US$28 billion this year as its factories work beyond capacity to meet heightened demand.

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TSMC supplies almost all of the world’s major chip developers worldwide including Apple, Qualcomm, and Nvidia. TSMC and other chipmakers from Taiwan including United Microelectronics and Powerchip Semiconductor Manufacturing Corp. play a central role in the global semiconductor supply chain.

© Agence France-Presse

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As legacy automakers around the world reach for a battery breakthrough, Japan Inc.’s rivals seemed to be charging into the race and leading. The world’s biggest car producer in 2020, Toyota Motor, has been considered a front-runner to produce a commercially viable solid-state battery. In fact, the carmaker plans to announce a prototype of a car powered by a solid-state battery by the end of this year and seeking to launch a vehicle in the early 2020s.

The quest for a solid-state battery has been heating up lately as it would be more stable and faster to charge than the lithium-ion batteries used today by innovative carmakers ranging from Tesla of the US to China’s BYD.  The competition to develop a solid-state battery is about gaining an advantage in a fast-approaching era when many more consumers are going to be buying their first electric vehicles (EVs) – part of a transition from an auto industry that runs mostly on gasoline and diesel to one that runs mostly on electricity. Legacy automakers are hoping that their battery partners will give them an edge and help to close the gap.

The two biggest drawbacks of electric cars — limited range and slow charging — will likely persist until battery makers can solve the dendrite problem. It’s estimated that a solid-state car could have a range of 1000 kilometers (621 miles) and take 10 minutes to charge. Solid-state batteries deteriorate less over time, and Toyota aims to retain 90% of the battery’s performance over a 30-year lifespan. Toyota leads the solid-state battery patent count, owning over 1,000 patents related to the technology.

What is being done in Japan?

To help accelerate the development of the technology, the Nikkei reports that the Japanese government is considering spending part of a new ¥2 trillion (US$19.2 billion) decarbonization fund in building a solid-state battery production infrastructure in the country. Industrial firms such as Mitsui Kinzoku, petrol company Idemitsu Kosan, and Sumitomo Chemical are all gearing up to make solid electrolytes.

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Toyota has been pursuing a next-generation battery for over a decade, making the largest number of patent applications for solid-state batteries from 2014 to 2018, according to a report by the European Patent Office and the International Energy Agency. Toyota vowed at an earnings conference on May 12 to sell 8 million electrified vehicles in 2030, with fuel-cell vehicles and EVs accounting for a quarter of that estimate.

Then, in April 2020 Toyota established Prime Planet Energy & Solutions, a joint venture with Panasonic to develop vehicle batteries, with a focus on solid-state batteries. Another Japanese automaker, Nissan, expects a solid-state battery prototype vehicle by 2028. 

Separately, as per Nikkei Asia, Japanese industrial manufacturer Hitachi Zosen has developed a solid-state battery claimed to harness one of the highest capacities in the industry. Additionally, the Osaka-based company states this new solid-state battery can operate under a larger range of temperatures. It will soon be tested in industrial machinery and space.

The Japanese company said its new breakthrough battery offers a capacity seven times greater than its previous models. The Japanese-built solid-state battery has a capacity of 1,000 milliamp-hours (mAh). Additionally, it can operate within a temperature range of -40º to 100ºC (-40º to 212ºF). Hitachi Zosen even announced an agreement with the Japan Aerospace Exploration Agency to test its solid-state batteries in space.

Basically, the intensifying global battery race is a challenge for Japan. China and South Korea rapidly eroded the country’s dominance of the market for lithium-ion batteries, the previous standard for battery power that is the most common battery used in a majority of devices today. And the reason why Japan’s government has realized the importance of being the frontrunner of the next evolution in battery innovation, and is spearheading the commercialization of the latest battery tech.

The post Can Toyota take pole in the solid-state battery race? appeared first on Tech Wire Asia.

Joining multiple other Asian countries, the Bank of Japan (BoJ) on Monday kickstarted its central bank digital currency (CBDC) trials, with an aim to explore the technical feasibility of a digital yen in its first phase Proof of Concept (PoC) which will last for a year to March 2022. Although it is undecided if the central bank wants to proceed with a CBDC, Asian countries are so far leading in terms of developing and experimenting with forms of national digital currencies.

Six months ago, the central bank published a CBDC document in which it outlined three stages of trials, including two phases for the PoC followed by a pilot. Base on a short statement this week, BoJ said it would trial basic functions such as issuance, distribution, and redemption. “BoJ has been undertaking preparations to begin experiments on CBDC in the early fiscal year 2021, to test the technical feasibility of the core functions and features required for CBDC,” the bank said.

As necessary preparations are now complete, the bank said the first phase of the PoC, Phase 1, had begun on Monday. In that initial phase, “the Bank plans to develop a test environment for the CBDC system and conduct experiments on the basic functions that are core to CBDC as a payment instrument such as issuance, distribution, and redemption. This phase will be carried out through March 2022, for a duration of one year,” it added.

In March this year, BoJ Governor Haruhiko Kuroda also spoke about some of the drivers. Japan’s objectives are a little different from most countries because of the heavy use of cash in retail payments and the 2011 earthquake and tsunami, which caused widespread disruption. Hence there is a greater emphasis on the ability to execute payments offline.

Last year, when the Bank outlined three potential motivations for a CBDC, among them were because retail payments in Japan are still dominated by cash. Bearing any drastic changes, the Bank wants to be ready to provide a CBDC as an option. Another reason would be if it was required to improve the stability and efficiency of settlement systems.

On this point, there are several private Japanese initiatives, particularly from banks looking to offer digital yen. The third CBDC driver is the potential need for a digital yen to support a digital society. For now, there’s quite a push by Japanese institutions to use blockchain and a wholesale CBDC would be useful for on-chain settlement.

Asia leads in central bank digital currencies

Japan’s main economic rival, China, has piloted a digital yuan, known as digital currency electronic payment (DCEP), and tested the system in four major cities. In fact, China is leading and dominating the digital payments scene with Ant Financial. Beyond China, the outlook, in Asia, on central bank digital currency seems to be more optimistic than the rest parts of the world.

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In Southeast Asia, Cambodia has been investigating the development of a central bank digital currency since 2017, having relied heavily on the US dollar for decades. After a series of pilot tests, Cambodia officially announced the launch of Bakong, it’s a central bank-backed digital currency that supports transactions in the dollar and riel, the Cambodian currency. Bakong could allow Cambodians the opportunity to bypass card-based payments altogether and leapfrog straight to a cashless digital system.

Meanwhile, a joint project between the Bank of Thailand and the Hong Kong Monetary Authority (HKMA) saw the successful trialing of a Distributed Ledger Technology (DLT) for cross-border fund transfers, under Project InthanonLionRock.

Aside from China, Cambodia, Thailand, and Hong Kong, multiple other Asian countries are exploring developing and experimenting with forms of national digital currencies, including India, Indonesia, Vietnam, the Philippines, and Korea. Countries like Singapore and Malaysia said they do not have any immediate plans to issue CBDC but instead are focussing on their rollout of digital bank licenses.

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