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<p class="is-style-lead">The Bank of Japan (BOJ) has completed the second stage of its CBDC experimentation and is now moving forward with its pilot project.</p>



<p>The Bank of Japan (<a href="https://crypto.news/japan-to-conduct-a-pilot-program-for-circulating-digital-yen/" data-type="URL" data-id="https://crypto.news/japan-to-conduct-a-pilot-program-for-circulating-digital-yen/">BOJ</a>) has successfully wrapped up the second phase of its study into the possibilities of a central bank digital currency (CBDC), according to a recently released report. This year-long project, spanning from April 2022 to March 2023, enhanced and built upon the foundational ledger functions explored in the first phase.</p>



<p>The <a href="https://www.boj.or.jp/en/paym/digital/dig230529a.pdf" target="_blank" data-type="URL" data-id="https://www.boj.or.jp/en/paym/digital/dig230529a.pdf" rel="noreferrer noopener">report</a> indicates that this second phase focused on technologies to establish maximum limits on CBDC holdings, which the BOJ views as a crucial step towards ensuring financial stability. </p>



<figure class="wp-block-image size-full"><img decoding="async" width="710" height="938" src="https://crypto.news/app/uploads/2023/05/1A3733E3-32CA-4C0D-861E-C875B979C5D1_1_201_a.jpeg" alt="Bank of Japan advances CBDC program, following successful tests - 1" class="wp-image-14162754"></figure>



<p>This is in anticipation of any abrupt transitions from conventional banking to <a href="https://crypto.news/visa-and-microsoft-join-forces-for-brazilian-cbdc-pilot-project/" data-type="URL" data-id="https://crypto.news/visa-and-microsoft-join-forces-for-brazilian-cbdc-pilot-project/">CBDC</a> usage. This consideration extends to scenarios where an individual user maintains multiple accounts via different intermediaries.</p>



<p>Additionally, user-friendly procedures for initiating and scheduling payments were evaluated. Technological advancements in database languages and ledger designs were also explored, including trials on an innovative flexible-value token model. </p>



<p>To accommodate multiple transactions from a single account more efficiently, an orchestration system was introduced.</p>



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<p>A model consisting of 100,000 hypothetical users and five intermediaries was utilized in the experiment, which tested load capacities from 500 to 3,000 transactions per second. </p>



<p>While not exhaustively <a href="https://www.boj.or.jp/en/paym/digital/dig230529a.pdf" target="_blank" data-type="URL" data-id="https://www.boj.or.jp/en/paym/digital/dig230529a.pdf" rel="noreferrer noopener">addressed</a>, privacy concerns were inherently included, and offline payments were evaluated, especially in relation to fraud prevention and privacy upkeep.</p>



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<p>The POCs achieved their objectives, according to the BOJ, paving the way for the timely launch of the CBDC pilot project, which will further study process flows and <a href="https://crypto.news/cardanos-integrations-to-improve-on-chain-gaming-and-smart-contracts/" data-type="URL" data-id="https://crypto.news/cardanos-integrations-to-improve-on-chain-gaming-and-smart-contracts/">integration</a> with external systems. Intriguingly, the report emphasizes that the Japanese public will be instrumental in the decision-making process regarding the issuance of a CBDC.</p>



<p>To facilitate input from the private sector, a CBDC Forum will be established. The BOJ aims to reach a definitive decision about the launch of a CBDC by 2026.</p>



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Bank of Japan advances CBDC program, following successful tests

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