The Bank of Japan has announced plans to roll out a new pilot for its central bank digital currency (CBDC) program in April.
A CBDC is a digital version of a state’s fiat currency—like the U.S. dollar or the yen—backed by a central bank. CBDCs are digital assets, but are different from the likes of Bitcoin, Ethereum, or Dogecoin, as they are run on a private blockchain controlled by a government.
The bank does not expect any actual transactions to take place among participating users, instead only “simulated transactions” will be settled during the pilot, as per the announcement.
The bank will look to test both the CBDCs’ “technical feasibility,” which wasn’t possible in previous trials, as well as to learn more from private businesses about how they’re using the digital currency.
The trial will also explore the technical challenges of connecting the experimental CBDC network with existing financial networks and determine the appropriate data models and architecture for facilitating offline payments.
The latest announcement is just the latest in various trials, experiments, and working papers from the central bank.
The G8 and CBDCs
Japan isn’t the only major developed economy that is pushing ahead with its CBDC plans.
The Bank of England and the UK Treasury recently unveiled a new consultation on implementing a “Britcoin,” which it expects could be in use by the late 2020s. The UK has been working together on a digital pound since at least April 2021, when an official task force was formed.
In September, Australia also announced its intention to move forward with its plans for a CBDC pilot, which would be called an eAud.
According to research from the Bank of America (BoA), around 114 central banks—representing 58% of all countries, are now exploring CBDCs.
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Source: https://decrypt.co/121584/japan-announces-launch-new-cbdc-pilot-april
