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<p><strong>The Bank of Japan is moving on to a pilot program after evaluating the results from the proof-of-concept experiments.</strong></p>
<h2 style="text-align: center;" id="bank-of-japan-initiates-cbdc-pilot-program">Bank of Japan Initiates CBDC Pilot Program</h2>
<p>The Bank of Japan (BOJ) has commenced its central bank digital currency (CBDC) pilot project following the successful completion of the second phase of its proof-of-concept (PoC) <a href="https://walletinvestor.com/magazine/japan-launches-its-central-bank-digital-currency-pilot-this-april" target="_blank" rel="noopener">experiments</a>. The PoC&#8217;s objective was to <a href="https://www.boj.or.jp/en/paym/digital/dig230529a.pdf" target="_blank" rel="noopener">evaluate additional functions and new technologies</a> for CBDC implementation.</p>
<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">The Bank of Japan released the results and findings of a report on central bank digital currencies</p>
<p>Japan launched a pilot program in April, the bank said in its report on Monday.<a href="https://t.co/PD59HlNytY">https://t.co/PD59HlNytY</a></p>
<p>— Michael Branch (@Michael63140627) <a href="https://twitter.com/Michael63140627/status/1663474279063728129?ref_src=twsrc%5Etfw">May 30, 2023</a></p></blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<h2 style="text-align: center;" id="evaluation-of-additional-functions">Evaluation of Additional Functions</h2>
<p>In the evaluation of additional functions, the BOJ focused on preempting a sudden shift from bank deposits to CBDC, improving user convenience, and enabling coordination among intermediaries and external systems. The results indicated that implementing these functions would not significantly impact performance, ensuring scalability and reliability for social implementation. However, further considerations and solutions are needed to achieve successful implementation.</p>
<h2 style="text-align: center;" id="evaluation-of-new-technologies">Evaluation of New Technologies</h2>
<p>The BOJ assessed the performance advantage of a token-based data model for ledgers compared to an account-based model. While the token-based approach showed potential for processing in parallel, it also posed resource requirements and implementation challenges for additional functions. NoSQL databases were considered for ledger and non-ledger CBDC systems, offering performance improvements but requiring examination from perspectives beyond performance.</p>
<h2 style="text-align: center;" id="cbdc-pilot-project-and-future-steps">CBDC Pilot Project and Future Steps</h2>
<p>The BOJ has initiated its CBDC pilot project as planned, gathering feedback from the public and businesses. The pilot program aims to test the end-to-end process flow, explore connections with external systems, and address considerations and solutions identified during the PoCs. Additionally, a CBDC Forum will be established to facilitate institutional arrangements for CBDC and incorporate insights from private businesses involved in retail payments.</p>
<h2 style="text-align: center;" id="conclusion">Conclusion</h2>
<p>Following the successful completion of the PoCs, the Bank of Japan has moved forward with its CBDC pilot project. The evaluation of additional functions and new technologies has provided valuable insights for CBDC implementation. The pilot program will serve as a crucial phase to test the complete process flow and address potential challenges. The establishment of the CBDC Forum demonstrates the BOJ&#8217;s commitment to involving stakeholders and incorporating diverse perspectives in the study of CBDCs.</p>

The Bank of Japan Launches CBDC Pilot Project After Successful PoCs

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