Bank of Japan Starts First Phase of CBDC Proof of Concept
Japan’s central bank has rolled out a PoC (proof-of-concept) for the central bank digital currency (CBDC), as per an official announcement made earlier today. After the completion of basic groundwork for piloting the technical viability of core CBDC features in the beginning of this year, the Bank of Japan has started testing CBDC in the initial stage today.
During this stage, the bank intends to create a trial environment for the CBDC platform and carry out trials on preliminary features linked to payment, disbursement, issuance and redemption of a CBDC.
As per the announcement, this stage is anticipated to be finished by March 2022.
The Bank of Japan initially revealed its idea to roll out CBDC trial in October 2021. The bank stressed that while it “has no plan to issue CBDC” from the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems, it is still important to prepare for “changes in circumstances in an appropriate manner.”
As per the actual CBDC trial, the bank anticipates to begin a trial of the CBDC program involving payment processing service providers and end customers following the successful completion of the second stage of trial. This stage will adopt further CBDC features in the trial conditions created in the initial stage and assess their viability.
The Bank of Japan, in recent times, has announced the setting up of the Liaison and Coordination Committee to join hands with private sector on the forthcoming CBDC trials.