• Japan plans to launch a pilot program for its central bank digital currency (CBDC) in April 2023.
• The pilot program will focus on the technical feasibility of the „digital yen“ and will include participation from private businesses.
• Japanese authorities are also considering lifting the ban on foreign stablecoins.
Japan Piloting Digital Currency in April
Japan has announced plans to commence a pilot program for its central bank digital currency (CBDC) in April 2023. This pilot includes participation from private businesses and will test a model of the CBDC ecosystem, focusing on the technical feasibility of the “digital yen” and not involving actual retail transactions.
Collaboration with Private Sector
The BoJ is actively collaborating with industry players to ensure a seamless transition, and has created a CBDC forum for feedback and communication between all parties involved. At least three Japanese megabanks and regional banks are expected to collaborate with the BoJ in this program.
Ban on Foreign Stablecoins
In addition to launching their own CBDC, Japanese authorities are also considering lifting their current ban on foreign stablecoins. If this ban were lifted, it would open up further opportunities for international payment solutions using cryptocurrencies such as Bitcoin or Etherium.
The BoJ had conducted proof-of-concept testing prior to announcing their plans for this CBDC pilot program, which was highly anticipated by local media outlets who had reported these intentions as early as November 2022.
Opening Remarks by Executive Director UCHIDA
The executive director of the Bank of Japan (BoJ), Shinichi Uchida, opened his speech at a CBDC committee meeting on February 17th with remarks about consultation with private sector regarding design of future CDBCs and key components such as alternative data models and frameworks for offline payments.