Bank of Japan Begins Proof of Concept for CBDC

A couple of days ago, the Bank of Japan (BOJ) set up a board to oversee its digital currency experiments. The board features the Japanese and International Banking and Fintech communities, securities dealers and payments association. The group will see to the smooth run of the proof of concept for its CBDC.

On April 5, the bank announced that it has begun tests on its central bank-issued digital currency. The Bank of Japan revealed that the first stage of the pilots will end in the first quarter of next year (March 2022).

Bank of Japan Has to Prepare Well for CBDC Proof of Concept – Shinichi Uchida

The next phase of the pilot tests will involve a thorough examination of the function, for instance, whether or not to limit the CBDC quantity that individuals can hold. Shinichi Uchida, Japan’s Central Bank Executive Director revealed that the BOJ could also launch an experiment to include payment platforms and end-users.

Uchida said that the bank has not changed its stance on digital currency but is not looking to release the CBDC any time soon. The bank initially planned to launch the pilot tests in October but has started earlier than expected. According to Uchida, the bank has to adequately prepare for any changes that might occur in the CBDC launch.

Other central banks as well have been actively developing their digital currencies, while also trying to prepare a regulatory framework around them.

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