Japan will launch a pilot programme in April to test a digital yen, the central bank has revealed.
The Bank of Japan will use the pilot programme to test that the central system, intermediary network systems and endpoint devices are integrated. The pilot will also iron out any flaws.
Alongside this, the Bank of Japan will establish a forum to discuss the central bank digital currency (CBDC) with private businesses related to retail payments.
The Bank of Japan has been testing a CBDC since April 2021. It will complete the proof-of-concept (PoC) stage in March, which tested the basic functions of a CBDC—issuance, payout and transfer—ahead of the pilot launch in April.
Uchida Shinichi, executive director of the Bank of Japan, commented: “The aim of the pilot programme is twofold: first, to test the technical feasibility not fully covered by the PoCs, and second, to utilise the skills and insights of private businesses in terms of technology and operation for designing a CBDC ecosystem in the possible event of social implementation.
“As for how to proceed with the pilot programme, we will launch the experiments with narrowed objectives, gradually expanding the scope of our experiments in a phased and planned manner.
“At present, we do not assume any actual transactions to take place among retailers and consumers; only simulated transactions will be settled in the test environment.”
Read more on digital currencies in Japan: Japan’s JCB to test payments infrastructure with digital currency