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Japan is joining a growing list of countries exploring the possibility of adopting a digital currency, with country\u2019s central bank, the Bank of Japan (BoJ), <\/span>announcing<\/span><\/a> that it would launch a pilot to test a \u201cdigital yen\u201d in April.\u00a0<\/span><\/p>\n The move comes more than two years after the BoJ made its first step in the space, launching a central bank digital currency (CBDC) proof of concept experiment, in October 2020.\u00a0<\/span><\/p>\n The BoJ kicked off the first phase of that PoC in April 2021 to test the basic transactions of CBDC, including issuance, payout and transfer. A year later, Japan entered phase 2 of the PoC, which is expected to end this March, to conduct additional functions of CBCD related to its core performance.<\/span><\/p>\n The pilot program, launching in April, aims to \u201ctest the technical feasibility not fully covered by the PoCs,\u201d and \u201cto utilize the skill and insights of private businesses in terms of technology and operation for designing a CBDC ecosystem in the possible event of social implementation,\u201d\u00a0<\/span>said<\/span><\/a> executive director of the Bank of Japan Uchida Shinichi during his speech.\u00a0<\/span><\/p>\n \u201cUnder the pilot program, we plan to develop a system for experiments, where a central system, intermediary network systems, intermediary systems and endpoint devices would be configured in an integrated manner,\u201d Uchida said.<\/p>\n Transactions do not occur between retailers and consumers for now (only simulated transactions will occur during the pilot stage), according to the Central Bank. Japan will have a CBDC forum and invite private businesses engaging in retail payments or related technologies to participate in the discussion, Uchida added.\u00a0<\/span><\/p>\n Last November, the BoJ unveiled its experiment plans for the digital yen, which would work with three undisclosed local banks and other regional banks to experiment with the CBDC, and to see whether it can operate in areas with limited internet access and during natural disasters, per <\/span>local media outlet Nikkei<\/span><\/a>. The country\u2019s three megabanks mentioned in the report are Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group.<\/span><\/p>\n As of December last year, 114 countries are actively considering rolling out a CBDC, up from 35 countries in May 2020, according to\u00a0<\/span>a report by Atlantic Council<\/span><\/a>. The result comes on the back of\u00a0<\/span>the partnership<\/span><\/a>\u00a0in October between the Bank of International Settlements (BIS) and four central banks \u2014 the Hong Kong Monetary Authority, the Bank of Thailand, the People\u2019s Bank of China, and the Central Bank of the United Arab Emirates \u2014 in piloting foreign exchange transactions across borders.\u00a0<\/span><\/p>\n Apart from China, Hong Kong, and Thailand, more than 20<\/span>\u00a0countries<\/span><\/a>, including Australia, India, Japan, South Korea, Singapore, Brazil, Malaysia, South Africa, and Ghana, will continue or begin in the pilot stage in 2023.\u00a0<\/span><\/p>\n Japan\u00a0<\/span>reportedly<\/span><\/a>\u00a0will decide on issuing its CBDC in 2026.\u00a0<\/span><\/p>\n<\/p><\/div>\n