The Bank of Japan is to begin the first phase of proof-of-concept testing of a central bank digital currency (CBDC) in early 2021, according to a statement published by the bank.

In phase one, “the bank will develop a test environment for the CBDC system and conduct experiments on the basic functions that are core to CBDC as a payment instrument — namely, issuance, distribution, and redemption,” the statement says.

Following a second phase of testing, the bank “will consider a pilot programme that involves PSPs and end users”. 

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