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- PoC Phase 1, with an expected duration of 1 year, will establish a systematic experimental environment to test and verify CBDC’s fundamental services.
- BOJ proclaimed Hitachi, Ltd. as a subcontractor in charge of constructing the required experimental environment.
- BOJ’s Governor Kuroda believes it’s necessary to be “well prepared” for any future changes in the economic environment.
The Bank of Japan (BOJ) or the Nichigin, as the people there prefer to call it, on Monday, April 5, Japan time (UTC +9), announced the launch of its Proof of Concept (PoC) for the technical feasibility of its Central Bank Digital Currency (CBDC). The BOJ first talked about a possible early-half (Spring) of 2021 CBDC PoC release in July of 2020.
Official Announcement Initiating Phase 1
Monday’s official announcement anchored Japan’s central bank’s plans for the PoC, revealing the phase 1 will deal with “establishing a systematic experimental environment” to test and verify the functioning of essential services, like issuance, distribution, and redemption, etc. This first phase experimenting’s expected duration is of roughly one year, i.e., until March 2022.
The 3 Phase Testing
Announced March 26, the BOJ and its “Central Bank Liaison Council” has planned the launch to be executed in 3 phases. For PoC phase 2, the financial institution plans to implement and test the additional functions of CBDC. This will be followed by a 3rd Pilot program where, if deemed necessary, and the bank will consider involving Payment Service Provider (PSP) and end-users. No expected timeline of completion for phase 2 has been set forth until now.
Hitachi, Ltd. Selected In-Charge
Meanwhile, the BOJ proclaimed the Japanese multinational conglomerate company, Hitachi, Ltd. as a subcontractor in charge of constructing the experimental environment for CBDC’s technical functions’ verification. The Chiyoda, a Tokyo-based establishment, was finalized after necessary bidding procedures.
The internationally acclaimed house has been known for dipping into a range of blockchain technology-based testings. Hitachi, back in January, partnered with Mizuho Financial Group to begin a PoC regarding the utilization of blockchain technology in the supply chain management field.
BOJ’s Necessary Future Preparations
The BOJ has long since stated that it does not aspire to issue its own CBDC; however, the Governor of BOJ Haruhiko Kuroda, recons to ensure a stable and efficient payment and settlement system, it’s necessary to be “well prepared” in case of any future changes in the economic environment. Kuroda also expressed that this view was shared by several central banks overseas.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
