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BOJ to begin pilot programme on CBDC from April
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BOJ will conduct simulated transactions in test
environment
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Pilot will help bank be ready if govt issues digital yen
-BOJ
(Adds details on BOJ's pilot programme plan, global context)
By Leika Kihara
TOKYO, Feb 17 (Reuters) - Japan will start a pilot
programme in April to test the use of a digital yen, its central
bank said on Friday, joining a growing number of countries
seeking to catch up to front-runner China in launching a central
bank digital currency (CBDC).
The widely expected move follows two years of experiments
the Bank of Japan (BOJ) has been conducting to decide whether to
issue a CBDC. It also comes ahead of BOJ's leadership transition
to academic Kazuo Ueda, who is expected to succeed incumbent
Haruhiko Kuroda. Kuroda's second five-year term ends in April.
"Our hope is that the pilot programme will lead to improved designs through discussion with private businesses," BOJ Executive Director Shinichi Uchida said in opening remarks at the central bank's meeting with private-sector executives. Under the pilot programme, the BOJ will conduct simulated transactions with private financial institutions in a test environment, Uchida said. It does not plan to conduct actual transactions among retailers and consumers, he said. The programme will help the BOJ be ready in case the government decides to issue a digital yen, the bank said.
"If a CBDC were to be issued in the future, exploring its framework in such a phased manner and engaging in highly transparent communication with the private sector are necessary steps to take for adoption in society," said Uchida, who has been named by the government as the next BOJ deputy governor.
Japan and other advanced economies are seeking to catch up
with China, which is at the fore of a global race to develop
CBDCs and has ramped up pilot schemes for retail payments.
The U.S. Federal Reserve has also been exploring how it can
launch a fully digital dollar that some have referred to as
Fedcoin. Fed leaders have said that any launch of such an asset
would need the support of elected leaders.
(Reporting by Leika Kihara; Editing by Christian Schmollinger
and Tom Hogue)
