Japan's central bank to conduct digital yen pilot in April

After more than two years of exploring a central bank digital currency, Japan's central bank said Friday it will launch a pilot program in April to test out its digital yen, according to a Friday release. The goal of the program is to "test the technical feasibility" and "to utilize the skills and insights of private businesses in terms of technology and operation for designing a CBDC ecosystem in the possible event of social implementation," Bank of Japan Executive Director Shinichi Uchida said in a statement at the fifth meeting of the BoJ's Liaison and Coordination Committee on Central Bank Digital Currency. Transactions between retailers and consumers are not expected to take hold during the pilot, the statement noted. Instead, "simulated transactions will be settled in the test environment." A CBDC is a form of digital currency issued by a country's central bank instead of a commercial bank. Their value is pegged to the country's fiat currency. Uchida's remarks come after the BoJ in November 2022 had planned to conduct digital yen-focused experiments with three of the country's megabanks , including Mitsubishi UFJ Financial Group ( MUFG ), Japan Post bank ( OTCPK:JPSTF ) ( OTCPK:JPPTY ) and Mizuho Financial Group ( MFG ) ( OTCPK:MZHOF ). The move also comes on the heels of economic professor Kazuo Ueda's nomination as the BoJ's next governor.