Another major banking institution has commenced with the first phase of testing for a central bank digital currency, the Bank of Japan. The bank’s proof-of-concept program has entered the first step, announced by the institution on April 5th.
The first testing phase will focus on the technicalities and features of the CBDC, and will continue all the way through March of 2022. The main goal of the Bank of Japan is to develop a test environment for digital currency. As quoted by the bank itself, the environment’s main purpose is to experiment on “the basic functions that are core to CBDC as a payment instrument such as issuance, distribution and redemption.”
However, it was never the bank’s intent to rush into things, and sources say that for now, the BOJ is nowhere near releasing a CBDC. The BOJ Executive Director, Shinichi Uchida, asserted the importance of the pilot program and revealed that there is no current plan to releases a CBDC onto the public.
Furthermore, the testing program will remain available only to a circle of a chosen few. This means that payment services (not tied to the project) and end-users will be potentially introduced to the testing program when it reaches the end of the second step, of which we know little about. It seems like there is a long way to go until then.