Japan starts CBDC pilot project

The Bank of Japan (BoJ) announces further development steps and aims to start with digital central bank money as early as April 2023.

The Bank of Japan (BoJ) is announcing further development steps and wants to start in April 2023 with digital central bank money.

Japan is moving ahead with the development of the digital yen and will launch a pilot project for a digital central bank currency (CBDC) in April. After more than two years of proof of concept (PoC), the Bank of Japan (BoJ) has now announced the next phase of its CBDC program.

According to a press release, two main goals are being pursued. It includes testing the "technical feasibility, not fully covered by the PoCs." as well as the "leveraging the capabilities and insights of private sector companies in technology and operations to design a CBDC ecosystem in case of a potential societal rollout."

The BoJ, however, does not expect a full-fledged payments system in the near term. "At this point, we do not expect actual transactions between retailers and consumers. Only simulated transactions will be processed in the test environment," the central bank said.

Japan is not the only country developing its own digital central bank currency. Globally, 114 countries are already working on their own CBDC projects.