The Bank finished its proof-of-concept testing in April and then launched a pilot program for the "digital yen" in 2021.
The central bank digital currency (CBDC) pilot in Japan, where Tether and other foreign stablecoins are illegal, is set to start in April 2023. It intends to involve commercial companies and explore a CBDC ecosystem model.
The Bank of Japan (BoJ) executive director Shinichi Uchida's opening remarks at a CBDC committee meeting public on February 17. Uchida stated that the Bank chose to start a "digital yen" pilot program in April after completing its proof-of-concept testing, which started in 2021.
The pilot test will further research into the technological viability of the "digital yen" and expand the experiment to include private enterprises in the modeling of the CBDC ecosystem. As stated by the official, only simulated retail transactions would be carried out during the trial.
Uchida's lecture focuses on the future CBDC's design and the necessity of consulting the private sector on alternative data models, offline payment structures, and other crucial system components. The CBDC forum will be established for this type of consultation.
Given that the BoJ's intentions were first published by local media in November 2022, the news of the CBDC pilot was eagerly awaited. According to the rumors, the BoJ would work with at least three Japanese megabanks and regional banks.
Japanese officials are also thinking about easing the 2022 law's restriction on international stablecoins. The revisions should be approved by June 2023, according to the Financial Services Agency of Japan. While they won't automatically accept any foreign stablecoin into the market, they will give the go-ahead to those that pass individual inspections.