Japan’s card issuer JCB to start Phase 2 of offline CBDC trials

JCB, a major card issuer from Japan, recently announced that it plans to move on into Phase 2 of a pilot to trial offline P2P payments for the local central bank digital currency (CBDC).

BREAKING: JCB, IDEMIA and Soft Space launch JCBDC Phase 2 pilot to trial CBDC offline P2P payments in Japan

"The project uses IDEMIA’s protocol, the industry standard for Offline CBDC Payments, and leverages on Soft Space’s expertise in contactless payments."

Reminder that… https://t.co/PMWJI0KVhb pic.twitter.com/MNI3f7Re3X

— TaTa (@hbarTaTa) December 13, 2023

JCB is ready to start the next phase of trials

So far, the company has been conducting Phase 1 trials, which were performed in partnership with two other firms — Soft Space and Idemia. The trials consisted of the development and testing of a mechanism that would enable local businesses to accept payments made in CBDC.

The idea was to let the merchants accept digital currency payments without having to replace or modify their Point of Sale (PoS) terminals, or even the payment cards.

Now, however, the company is ready to move on to Phase 2, which will allow the customers to transfer CBDC funds from one individual to another with nothing but their cards and mobile phones. The technology should allow for the payments to work even when there is no internet access, ensuring that the users will be able to make payments under any circumstances.

These offline P2P money transfers will be performed via cards, from one card to the other, by using mobile NFC devices as intermediaries. Alternatively, they should also work if users try to send money from one mobile NFC device to another directly.

Soft Space and Idemia to continue their work in Phase 2

The two firms that collaborated with JCB until now, Idemia and Soft Space, will continue to play a vital role in the ongoing trial. They will provide the tokenization back-end server, card application, mobile wallet application, as well as SoftPOS kit. Furthermore, they will also provide all necessary SDKs and APIs for the purpose of integrating the system and application.

Soft Space’s CEO, Joel Tay, commented on his company’s participation in the pilot. He said that Soft Space and its team are delighted that the first phase of the project has been successful, and that it managed to leverage on existing technologies that JCB already uses.

He mentioned the contactless EMV technology as an example, as well as Tap on Mobile SoftPOS. Moving forward into Phase Two, he said that his firm will also help by evaluating host card emulation (HCE), as well as numerous other offline scenarios that the company has been working on alongside JCB.

The goal is to develop as many real-life use cases for the project, all of which are aimed at making sure that the CBDC solution that will eventually get implemented can offer practical use to society in Japan.