NHK has learned that Japan's Finance Ministry plans to launch an expert panel next month to look at the feasibility of issuing a digital yen.

The ministry's panel is expected to discuss how to create a framework for a digital currency backed by the central bank, otherwise known as "CBDC". They will use findings from a technical study the Bank of Japan conducted for two years up until this month.

The launch of the panel coincides with the start of a digital yen pilot program involving the BOJ, financial institutions and other private-sector participants.

BOJ officials say they currently have no concrete plans to issue a digital currency. It's expected to take time to hammer out the legal and framework issues needed to do so.

The ministry plans to take into account the opinions of the panel and prepare for the possible introduction of a digital yen.

Central banks in Europe, the United States and China are already exploring the viability of digital currencies. They can be used in the same way as banknotes and coins.

The implications of digital currencies came into the spotlight when US tech giant Meta announced four years ago that it was planning to issue its own cryptocurrency.

Regulators raised concerns that it could be used for money laundering and may threaten monetary stability. Meta, previously known as Facebook, has since given up on the idea.

China is seen as the frontrunner in issuing a digital currency. A digital yuan debuted on an experimental basis at the Beijing Olympics in February last year.

The US Federal Reserve released its first report on a digital dollar in 2022.

The European Central Bank is expected to decide this year whether to issue a digital euro.

India is also planning to issue its currency in digital form.