While the Western world is in no hurry with the CBDC, two more countries have announced their upcoming CBDC pilots.
Japan has been experimenting with the CBDC technology for some time, and will now launch a pilot CBDC in April 2023. The testing phase was done by PoCs, and the pilot will further test the technical aspects not yet covered, and will gather feedback from private businesses for technical and operational design of the ecosystem.
Russia has greater urgency and wider objectives as it pushed forward the initial plan to launch a pilot in 2024 to as early as June 2023. The central bank of Russia deputy chairman Olga Skorobogatova made the announcement at an event. The pilot will include 13 banks and will have real transactions using the digital rouble. Russia is facing SWIFT sanctions and other economic constraints that impact cross-border payments and trade. As per reports, it is also mulling a gold-backed token in collaboration with Iran.
The Bank of Japan began its CBDC initiative in 2020 by releasing a concept note. The Proof of Concept (PoC) stage checked technical feasibility and core functions. It built a central CBDC ledger, the core of the entire system. Next, more functions were added, such as limits to amounts transacted when a user has multiple accounts, in addition to basic transactions. This phase is currently in progress until March. From April, it will launch a formal pilot.
Sharing more details on what the pilot would entail, the note said: “Regarding the first point, in the CBDC system, there is a need for an interlinking of various systems ranging from the central bank to users through intermediaries, intermediary network systems, and other stakeholders. Previously, subjects of PoCs were chiefly the central system. Under the pilot program, however, we plan to develop a system for experiments, where a central system, intermediary network systems, intermediary systems, and endpoint devices would be configured in an integrated manner. On this basis, we plan to test the end-to-end process flow and outline the measures and potential challenges for connecting the experimental system with external ones.”
To gather feedback and for discussion of finer points, Japan will set up a CBDC Forum. The final objective is a “digital society” and “a CBDC that would be acceptable to both society at large and end users.”
Sources:
https://www.boj.or.jp/en/about/press/koen_2023/ko230217a.htm
https://tass.ru/ekonomika/17074007
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