Bank of Japan to start digital currency proof-of-concept in 2021. The Bank for International Settlements (BIS) today released its first joint report on central bank digital currencies, in partnership with a group of seven central banks, focusing on the founding principles and core features of CBDCs.
In addition to the paper, the Bank of Japan, one of the group’s members, published a document detailing, from a Japan-centric viewpoint, its own unique approach to CBDCs.
According to the BoJ paper, the first of many test phases for its own CBDC will start sometime in 2021. This will involve the construction of a currency test environment and studies on the functions of its basement as a payment instrument.
The BoJ report notes that a core feature of the digital currency must be resilience in the face of infrastructure disrupted by forces Majeure, stating “Offline use in times of system and network failures as well as electrical outages is also important for Japan, given the frequent occurrence of natural disasters.”
The report provides no details on how providing against such events might be achieved, although there are solutions that address potential electrical or network failures for Bitcoin (BTC) and other blockchain-based cryptocurrencies. These include the development of mesh networks based around long-wave radio transmitters, and Blockstream’s satellite network, which broadcasts Bitcoin transactions via space.
The research group on the digital currency of the BIS was revealed in January 2020 and included central banks from Japan, Canada, Sweden , Switzerland, the United Kingdom and the European Central Bank. Since then, the United State Federal Reserve has also joined the party.
[image: Clay Banks]