Japan Credit Bureau Begins CBDC Infrastructure Testing
- Japan joins a long list of countries exploring the launch of a CBDC.
- Japanese citizens are reportedly not keen on a CBDC despite the country’s ambition. Locals appear comfortable with the existing payment systems.
Japan’s attempt to launch its own central bank digital currency (CBDC) has taken a new leap after the Japan Credit Bureau (JCB), announced that it had begun its CBDC infrastructure testing. The JCB is the Japanese equivalent of global payment systems like Mastercard and has been a key player in Japan’s ambitions in the digital payment world. The infrastructure testing will presumably prepare the JCB for the nationwide CBDC. The project reportedly has the backing of the Bank of Japan.
According to local reports, the infrastructure project, dubbed JCBDC, will help modify the JCB’s current credit card infrastructure for CBDC payments. JCB will develop the system in partnership with Malaysian Softspace and French facial recognition technology firm IDEMIA.
The payment platform will reportedly feature a touch payment solution, the production and distribution of plastic cards for CBDC, and a simulation of the actual operational environment of the CBDC. Later phases of testing might include QR codes and mobile payment tools.
JCB is not a novice to new technologies. The company has previously been involved in blockchain-based projects, including a 2020 trial project with Fujitsu Laboratories for a blockchain-based digital identification interoperability system.
Japan and its Plans for a CBDC
The Bank of Japan announced in 2020 that it would begin testing for a digital yen. The announcement came months after the BoJ governor, Haruhiko Kuroda, said that the institution had no interest in a digital yen.
The Bank of Japan announced in 2020 that it would begin testing for a digital Yen. The announcement came months after the BoJ governor Haruhiko Kuroda said that the institution had no interest in a digital Yen.
In August, the BOJ reportedly concluded that it was not technically feasible to issue a CBDC at the moment. The bank found that most Japanese people are not interested in CBDCs since they have extensive access to a large range of affordable, effective internet banking services and digital payment solutions. Additionally, crypto cannot currently rival the perks that users of conventional payment portals receive, such as payment points that can be used for shopping or settlements in the future.
Japan has a high level of cash issuance, which makes up around 20% of its nominal GDP. Despite the popularity of digital payment methods, the majority of transactions are still made using cash, particularly among the country’s older demographic.
However, Japan has a friendly disposition to cryptocurrency as a whole. The country’s Payment Services Acts describe crypto-assets as payment methods that are not denominated in fiat money and can serve as a means of payment. Japan has no restrictions on crypto ownership and investment.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
