Japan, a nation where foreign stablecoins like Tether are prohibited, plans to begin its central bank digital currency (CBDC) pilot in April 2023. It aims to include private businesses and test a model of a CBDC ecosystem.
On Feb. 17, the Bank of Japan (BoJ) released the opening speech of its executive director Shinichi Uchida at a CBDC committee meeting. In it, Uchida announces that the Bank decided to launch a pilot program for “digital yen” in April after finishing its proof-of-concept testing, which began in 2021.
The pilot test will continue the work on the technical feasibility of “digital yen” and extend the experiment to modeling a CBDC ecosystem with the participation of private companies. As the official specifies, no actual retail transactions will be made during the pilot, only simulated ones.
Uchida’s speech focuses on the design of the future CBDC and the need to consult with the private sector on alternative data models, architectures for offline payments and other vital elements of the system. For this kind of consultation, the CBDC forum will be created.
The news about the CBDC pilot was highly anticipated, as local media reported the BoJ’s intention back in November 2022. According to the reports, at least three Japanese megabanks and regional banks will collaborate with the BoJ.
Meanwhile, Japanese authorities also consider lifting the ban on foreign stablecoins, which came into law in 2022. According to the Financial Services Agency of Japan, the amendments should be passed by June 2023. While they won’t let any foreign stablecoin into the market automatically, the green light will be shown to those coins which successfully pass individual checks.