Japan’s International Payments System will test plastic cards for CBDC

Published at: Oct. 24, 2022

Japan Credit Bureau (JCB), a Japanese analog to international payments systems like Visa or Mastercard, announced the start of its central bank digital currency (CBDC) infrastructure testing. The project will assumably prepare the payments platform for a national CBDC, which is currently being tested by the Bank of Japan (BoJ). 

The infrastructure project, announced by the company in local media, will come under the title JCBDC and aims at adjusting the JCB’s existing credit card infrastructure for CBDC payments. The France-based provider of facial recognition technology IDEMIA and Malaysian Softspace will collaborate with JCB in the platform’s development.

The platform will consist of three major directions — a touch payment solution, an issuance and provision of plastic cards for CBDC and a simulation of the working CBDC environment. JCB also plans to adjust the mobile payment tools and QR codes, but in the later stages of testing.

JCB plans to develop a payment solution by the end of 2022 and start the demonstration experiments at actual stores by the end of March 2023.

The BOJ shared a three-phase trial outline for its CBDC back in Oct. 2020. The second phase of the trials, which would test the technical aspects of the issuance of the digital yen, should start this year. According to the BoJ governor, the digital yen could launch by 2026, and the decision won’t be made by the central bank alone.

Related: Japan is losing its place as the world's gaming capital because of crypto hostility

There is still no certainty about the project launch or the possible scope of its implementation. In January, the former head of the BOJ’s financial settlement department advised against using the digital yen as a part of the country's monetary policy.

JCB is not a newcomer to digital innovations — it started a pilot of a digital identity interoperability system based on blockchain technology in collaboration with Fujitsu Laboratories in 2020.

Tags
Adoption
Regulation
Japan
Bank Of Japan
Cbdc
Credit Cards
Debit Cards
Contactless Cards
Related Posts
Asian CBDC projects: What are they doing now?
The rapid growth of mainstream attention toward cryptocurrencies has forced the hands of numerous governments to create their digital alternatives. Over the past few years, interest from various jurisdictions has been pointed towards central bank digital currencies (CBDCs) — digital versions of government-issued fiat. Given their capacity to use blockchain technology to facilitate a simplified fiscal policy — not to mention calibrate privacy features and even provide cross-border banking services to the unbanked — CBDCs continue to gain even more attention from various governments worldwide. Already, surveys show more than 80% of central banks are researching CBDCs, with some working …
Adoption / Oct. 16, 2021
Japan will prioritize simplicity in CBDC design, says central bank executive
While Japan’s CBDC plans are still in the research stage, Shinichi Uchida, an executive of the Bank of Japan (BOJ), has said simplicity will drive the central bank’s design thesis for the digital yen. According to Reuters, Uchida made this known during a speech delivered on Friday calling for modalities to be put in place to ensure the CBDC co-exists with existing private payment channels. For Uchida, vertical integration of the digital yen within the private sector payment matrix will require a simple CBDC design. Part of this simple design could involve creating a framework for people to use both …
Adoption / Oct. 15, 2021
The Bank of Japan to launch its CBDC pilot before May
Japan, a nation where foreign stablecoins like USDT are prohibited, plans to begin its central bank digital currency (CBDC) pilot in April 2023. It will aim to include private businesses and test an ecosystem. On Feb. 17 the Bank of Japan (BoJ) released the opening speech of its executive director Shinichi Uchida at the CBDC committee meeting. In it, Uchida announces that the Bank decided to launch a pilot program for “digital yen” in April, after finishing its Proof of Concept testing, that has begun in 2021. The pilot test will continue the work on the technical feasibility of “digital …
Adoption / Feb. 17, 2023
Bank of Japan governor says CBDC preparation can't wait until hour of need
Japan is taking a measured but attentive approach to global interest in central bank digital currency issuance. In his latest remarks published on Tuesday, Bank of Japan Governor Kuroda Haruhiko noted that the institution has not changed its stance and still does not currently have a concrete plan to issue a CBDC. However, this non-commitment does not mean inactivity on the CBDC research and development front by any means. In October 2020, Japan's central bank pledged to begin the first of several testing phases for its own CBDC proof-of-concept. Haruhiko has now confirmed that these are due to begin this …
Adoption / March 16, 2021
‘No single digital currency will dominate the world’ Bank of Japan now says
There appears to be a disagreement within the top echelons of Japan’s government on the threat that China’s CBDC poses to the nation. Just last week, Kenji Okamura, vice-finance minister for Japan’s international affairs voiced concerns over its neighbor’s efforts in the space, stating “first-mover advantage is something we should be afraid of." Today’s statement from Kazushige Kamiyama, who leads the Bank of Japan’s (BOJ) CBDC efforts, appears to contradict this previous sentiment. He said that on the contrary, the first-mover advantage may easily turn into a disadvantage, and that no single digital currency will dominate: “I don’t think a …
Regulation / Oct. 15, 2020