The Central Bank of Japan (BOJ) announced on Friday that Japan will start the pilot program to test the use of digital yen in April, joining many countries that wanted to catch up with China by releasing a central bank digital currency (CBDC), as the U.S. Federal Reserve is also exploring how to launch a fully digital dollar that some called a Fedcoin.
The widely anticipated move came after the BOJ experimented for two years to decide whether to issue a CBDC, which was also ahead of the change in BOJ leadership to Kazuo Ueda, who was expected to succeed incumbent Haruhiko Kuroda.
Shinichi Uchida, BOJ Executive Director, said in the central bank’s meeting that the pilot program was intended to improve the design through discussion with private businesses.
He added that under the pilot program, the BOJ would make a simulated transaction with private financial institutions and had no plan to do an actual transaction with retailers and consumers. The pilot program would help the BOJ be prepared if the government decides to issue a digital yen.