People walk in front of the Bank of Japan headquarters in Tokyo on July 1, 2016. (KAZUHIRO NOGI / AFP)
TOKYO – Set to begin experimenting in how to operate a central bank digital currency, the Bank of Japan said on Friday that it has formed a committee bringing together policymakers and lobbyists from the banking and finance sector to help with the project.
“While there is no change in the BOJ’s stance it currently has no plan to issue a central bank digital currency, we believe that initiating experiments at this stage is a necessary step,” BOJ Executive Director Shinichi Uchida said in opening remarks at the first meeting of the committee held on Friday.
The central bank will begin feasibility tests from April on the core functions and features required for CBDC
The first phase of experimenting with a central bank digital currency (CBDC) will begin in April, and the BOJ aims to draw on the private sector for support and expertise.
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The central bank will begin feasibility tests from April on the core functions and features required for CBDC. If necessary, the BOJ would then move ahead to a pilot programme that involves private payment service providers and end users, Uchida said.
Stressing the need to prepare, Uchida said that a CBDC could one day play a key role in global payments and settlements.
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The committee consists of BOJ, Ministry of Finance and Financial Services Agency executives, as well as lobbyists from the banking and finance sector. Its next meeting is scheduled around September or October.
The BOJ last October announced plans to begin experimenting on how to operate its own digital currency, joining efforts by other central banks to catch up to the rapid innovation achieved by the private-sector.