The BOJ (Bank of Japan) has established a committee to liaise and coordinate the testing of a general purpose CBDC (central bank digital currency).
Although the central bank has repeatedly indicated that it does not intend to issue a digital currency anytime soon, it has been participating in research and preparation in testing the technical feasibility of the core functions and features required for a digital yen.
In October 2020, the BOJ announced it would begin testing a general purpose CBDC as early as April 2021.
In November, a consortium of 30 Japanese firms drawn from banks, utilities, retailers, brokerage firms and telecoms said it would issue and start testing a private digital currency in April 2021. The consortium said it plans to issue and test a private digital currency using a unified settlement platform to address a lack of interoperability between cashless payment applications, which remains a hurdle both for consumers and retailers.
The BOJ has now said it has created a so-called “Liaison and Coordination Committee on Central Bank Digital Currency” to share details of and provide updates on its PoC (proof of concept) with the private sector and the government. The committee will also consult on future steps to facilitate smooth implementation of the PoC, the central bank said.
Members of the committee include representatives from the MOF (Ministry of Finance), FSA (Financial Services Agency) and BOJ. Others are drawn from Japanese Bankers Association and other industry bodies and associations.
As the initial experiment, Phase 1 of the POC is scheduled to begin in spring 2021, to test the technical feasibility of the core functions and features required for the CBDC.