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The Bank of Japan will launch its CBDC pilot before May

The Bank of Japan will launch its CBDC pilot before May

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Japan, a nation where foreign stablecoins like USDT are banned, plans to begin its central bank digital currency (CBDC) pilot in April 2023. It will aim to involve private companies and test an ecosystem.

On Feb. 17, the Bank of Japan (BoJ) released the opening statement by its Executive Director Shinichi Uchida at the CBDC Committee meeting. In it, Uchida announces that the bank has decided to launch a “digital yen” pilot program in April after completing its proof-of-concept testing, which began in 2021.

The pilot will continue work on the technical feasibility of the “digital yen” and will extend the experiment to modeling a CBDC ecosystem involving private companies. As the official states, no actual retail transactions will be carried out during the pilot, only the simulated ones.

Uchida’s speech focuses on the design of the future CBDC and the need to consult with the private sector on alternative data models, offline payment architectures and other key elements of the system. The CBDC forum will be set up for this type of advice.

See Also: Japanese Prime Minister Says DAOs and NFTs Help Support Government’s “Cool Japan” Strategy

News of the CBDC pilot was highly anticipated as local media reported the BoJ’s intent back in November 2022. From these reports, it is known that at least three Japanese megabanks and regional banks will work with the BoJ.

Meanwhile, Japanese authorities are also considering lifting the ban on foreign stablecoins that came into effect in 2022. According to the Financial Services Agency (FSA) of Japan, the changes should be approved by June 2023. However, they will not automatically allow foreign stablecoins into the market; the green light will be given to those coins that have successfully passed the individual tests.

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