Today the Nikkei reported that the Bank of Japan (BoJ) is coordinating with the country’s three largest banks, MUFG, SMBC and Mizuho to participate in retail central bank digital currency (CBDC) experiments. Regional banks and fintechs will also be involved in the digital yen trials, which will start in the Spring of 2023.
Based on our knowledge of the central bank’s roadmap, we believe this is still part of the second phase of Proofs of Concept (PoC). Phase 2 started in April 2022 and was expected to continue for at least a year. One of the topics is coordination with intermediaries.
The Bank of Japan has not yet made a decision to proceed with a CBDC. There’s expected to be a pilot for two years or more, with a decision around 2026. It has previously been stated that there needs to be a national consensus to proceed interpreted as a referendum.
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