The central bank digital currency (CBDC) infrastructure testing has begun, according to the Japan Credit Bureau (JCB), a Japanese equivalent of global payment systems like Visa or Mastercard. The project, which the Bank of Japan is now testing, will presumably prepare the payments platform for a nationwide CBDC (BoJ).
JCB is not a novice to technological advancements; in 2020, it began a trial program for a blockchain-based digital identification interoperability system with Fujitsu Laboratories. By the end of 2022, JCB intends to create a payment solution, and by the end of March 2023, it intends to begin testing it in actual stores.
The organization’s JCBDC infrastructure project, which it revealed in local media, aims to modify the JCB’s current credit card infrastructure for CBDC payments. JCB will develop the platform with Malaysian Softspace and French facial recognition technology firm IDEMIA.
The platform will include three main components:
- A touch payment solution
- The creation and distribution of plastic cards for CBDC
- A simulation of the actual operating environment of CBDC
In the later rounds of testing, JCB also intends to modify QR codes and mobile payment tools.
In October 2020, the BOJ released a three-phase trial plan for its CBDC. This year should see the start of the trial’s second phase, which will examine the technical aspects of issuing the digital yen. The BoJ governor asserts that the central bank will not act alone in deciding whether to introduce the digital yen by 2026.
The beginning of the project and the potential scope of its implementation remain uncertain. In January, the former head of the BOJ’s financial settlement division issued a warning against incorporating the digital yen into the nation’s monetary policy.