The Bank of Japan (BoJ) plans to launch a digital yen pilot project (CBDC) by May 2023.
The executive director of the Bank of Japan, Shinichi Uchida, announced plans to launch the digital yen. The central bank digital currency pilot will start in April this year. This was followed by two proof-of-concept tests and a private study of the CBDC by the BoJ, which began in April 2021.
The CBDC pilot will continue the technical implementation of the digital yen and model the future ecosystem based on the digital currency with private sector participation. The pilot project will solely stimulate economic activity.
The government intends to examine the interconnection of various systems, from the central bank to retail users, taking into account the participation of all kinds of intermediaries, intermediary network systems, and other stakeholders.
In addition, the pilot project aims to closely engage the government with the private sector in designing and developing the ecosystem of the future CBDC. In particular, there are plans to consult on a number of significant issues, including:
- the infrastructure for offline payments;
- the use of alternative data models;
- the development of technical solutions for end users, etc.
A special forum will be created for such consultations. Recall that the Japanese government actively supports the Web3 sphere. The Ministry of Finance is engaged in its development. Besides, the Digital Agency of Japan is studying the peculiarities of decentralized organizations and the possibility of granting them legal status. The private sector is also actively involved in blockchain development. Thus, the financial holding company MUFG announced the release of a bank stablecoin in 2023, tied to the Japanese yen. The payment system Japan Credit Bureau is already preparing the issue of physical cards for the digital yen.