Bank of Japan director Uchida Shinichi said that the apex bank would launch a central bank digital currency (CBDC) pilot program to test the use of digital yen from April.
The Bank of Japan launched the Proof of Concept (PoC) phase of its CBDC experiment in April 2021. The PoC was designed to investigate the technical feasibility and processing performance of the CBDC system.
In view of improving the findings of the PoC phase, Uchida Schinichi announced on Feb. 17 that the BOJ would launch the pilot program starting in April 2023.
The two-fold objective of the pilot program is: first, to test the technical feasibility not fully covered by the PoCs, and second, to engage the private sector in the CBDC experiment.
Uchida said that the BOJ will conduct simulated transactions with private financial institutions in a test environment.
“…engaging in highly transparent communication with the private sector are necessary steps to take for adoption in society, Uchida added.
Uchida explained that the pilot program will help the BOJ be ready in case the government decides to issue a digital Yen.