The Bank of Japan (BoJ) is ready to launch a pilot program in April to test the use of the digital yen to examine the potential difficulties and advantages of a central bank digital currency (CBDC), digital yen.
BOJ Executive Director Shinichi Uchida said in opening remarks at the BoJ’s meeting with private-sector executives, “Our hope is that the pilot program will lead to improved designs through discussion with private businesses.”
Last August, the Bank of Japan dropped CBDC plans due to a lack of interest from the public. Most citizens were resistant to complying with CBDCs since they are provided with efficient internet banking services and digital payment tools.
However, it seems that now it’s on the track. In March 2023, the BoJ will finish the Proof of Concepts (PoCs), through which it has been demonstrating the technical viability of the fundamental operations of a CBDC. After that, the central bank will start a pilot program in April 2023.
To discuss and investigate a wide variety of issues with private companies relevant to retail payments, the BoJ will establish a CBDC Forum.
Also Read: Bank of Japan to begin Pilot Tests for Digital Yen next year
According to Uchida, the BoJ would replicate transactions with private financial institutions in a test setting for the CBDC pilot program. According to him, it has no plans to carry out actual transactions between retailers and customers.
The announcement notes “The Bank will develop a system for experiments, in which a central system, intermediary network systems, intermediary systems, and endpoint devices are configured in an integrated manner.”
As per BoJ, the scheme will enable the BOJ to be ready in the event that the government decides to issue a digital yen.
Uchida added, “If a CBDC were to be issued in the future, exploring its framework in such a phased manner and engaging in highly transparent communication with the private sector are necessary steps to take for adoption in society.”
