Japan to launch a new pilot of the digital yen in spring 2023

The Bank of Japan, in partnership with three megabanks, will conduct a pilot project to test the national digital currency (CBDC), Nikkei.

A new phase of the digital yen tests will begin in spring 2023. The experiments will last two years. A number of local financial institutions will also participate.

The regulator has set the pilot’s main objective as testing the deposit and withdrawal of CBDC from bank accounts. Given the possibility of disasters and other emergencies, the tests will include the use of the digital yen in an offline environment.

As Bank of Japan Governor Haruhiko Kuroda previously stated, the decision on whether to issue a CBDC will be made by 2026 after thorough testing.

The first phase of the digital currency experiments started in the country in spring 2021.

In July, Hideki Murai, a representative of the ruling Liberal Democratic Party, said that the state will develop a more detailed CBDC project by the end of 2022.

As of October, Japan’s largest payment system JCB announced testing of the existing credit-card infrastructure for payments in the national digital currency. Partners in the project will be the technology company IDEMIA and the infrastructure-solutions provider SoftSpace.

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