The Payment and Settlement Systems Department of the Bank of Japan (BOJ) conducted its Proof of Concept (PoC) Phase 1, building an experimental environment using several design alternatives for a Central Bank Digital Currency (CBDC) ledger as the foundation of a CBDC system, to evaluate whether its basic functions could be processed appropriately.
In PoC Phase 2, conducted from April 2022 to March 2023, the BOJ evaluated additional functions regarding which it would be desirable to confirm technical issues as early as possible, by adding them to the basic functions of the CBDC ledger, built in Phase 1. The results were evaluated in terms of processing performance and technical feasibility. Further, the potential use of new technologies that were not included in Phase 1 was explored with respect to data models and databases. Whether to issue a CBDC should be decided by discussions among the Japanese public.
The test results showed that compared with Phase 1, latency (time to process one transaction) increased somewhat, with its distribution having larger deviation due to the increase in the complexity of processing and the number of systems involved. Overall, however, no significant performance degradation was observed in latency, generally achieving less than 200 milliseconds (msec)/0.2 seconds (sec) or lower, even at high-loads. In Phase 2, additional functions of CBDC were evaluated in three separate blocks. It is desirable to identify technical issues early on so as to contribute to future decision making.
The experimental environment consisted of a ledger system and other systems, has an AP server for processing transaction requests, and a DB server (RDB) for recording and maintaining the results. Considering latency by system, for all function types, the level is relatively high and the shape of the distribution is flatter for orchestration systems. The latency of the orchestration system is thought to be affected by the fact that its operations include various limits checking processes, as well as inter-system communications, which are comparatively prone to volatility.
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