Bank of Japan to Launch CBDC Pilot to Test Technical Feasibility
The Bank of Japan (BoJ) has announced that it will launch a central bank digital currency (CBDC) pilot, the digital yen, in April.
This move follows the global trend of central banks exploring digital currencies.
The popularity of CBDCs has grown significantly, leading some to speculate that they may challenge the dominance of the US dollar.
The BoJ has been working on the digital yen since April 2021. After completing the proof of concept phases, it is finally ready for a pilot.
BREAKING: Bank of Japan has decided it will launch pilot program on CBDC this April.
— unusual_whales (@unusual_whales) February 17, 2023
BoJ’s Aim for the Pilot Program
The aim of the pilot program is two-fold, according to Uchida Shinichi, the Executive Director of the BoJ.
Firstly, it will test the technical feasibility not fully covered in the proof of concept phases. Secondly, it will utilize the skills and insights of private businesses to design a CBDC ecosystem in the possible event of social implementation.
The pilot will only test settlement through simulated transactions and not presently issue the CBDC for retailers.
Asia’s Progress on CBDCs
Asian countries such as China and India have already launched their CBDCs.
The People’s Bank of China launched its pilot program for the digital yuan, and India began its retail pilot of the digital rupee in December 2021.