Japan will launch the pilot phase of the digital yen. It will test the use of its version of CBDC. This is a decision that comes after more than two years of proof of concept experiments by the Bank of Japan.
Rollout of digital yen in April
Japan will launch its pilot program to test the use of its version of the central bank digital currency (CBDC). Due in April, it will be known as the digital yen. According to Shinichi Uchida, Executive Director of the Bank of Japan (BoJ), they plan to develop a system for the experiments. He made the statement during the fifth meeting of the BoJ Liaison and Coordination Committee on the CBDC.
The objective of the project pilot is dual. First, it will first be a question of testing the technical feasibility. Second is to use the skills and knowledge of private companies in terms of technology and operation. This is to design a CBDC ecosystem in the event of a social implementation, Uchida said.
The continuation of the two years of experiments carried out by the BoJ
The BoJ conducted two years of proof-of-concept experiments around the digital yen before coming to this initiative. Meanwhile, the Chinese digital yuan continues to lead the global CBDC race. Currently, it extends to more than 105 countries representing more than 95% of the world’s GDP. This move also comes at a time when the BoJ is ready for a leadership transition. Kazuo Ueda is to succeed Haruhiko Kuroda, whose second five-year term ends in April.
Nikkei announced that the BoJ would work on a digital yen with three megabanks and regional banks in the country. Currently, the pilot is not expected to see actual transactions between retailers and consumers, he said. He adds that the bank will establish a CBDC (Central Bank Digital Currency) forum and invite private companies to participate. These are companies engaged in retail payments or related technologies.
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