Japan-based international payment brand, JCB, has launched the JCBDC (JCB Digital Currency) Phase 2 pilot project together with IDEMIA and Soft Space. In Phase 1 of the JCBDC project, JCB, IDEMIA, and Soft Space developed a CBDC payment solution, enabling merchants to accept CBDC without the need to modify their POS terminals and payment cards.

As reported in the official announcement, this solution was successfully piloted in Japan in 2023, which has enabled the companies to proceed to the next phase of the project. In Phase 2 of the JCBCD project, customers now be able to transfer CBDC funds from one person to another person using their cards and mobile phones even without Internet connectivity. These offline P2P (peer-to-peer) fund transfers can either be done from one card to another with a mobile NFC device as an intermediary, or from one mobile NFC device to another mobile NFC device directly.

The announcement continues to state that this project is compliant with the open White Label Alliance (WLA) payment standard and uses secure elements to ensure optimal security. Two options for consumers in the Phase 2 of the JCBCD project In one option, consumers are able to send CBDC funds offline by tapping one person’s card to another person’s mobile NFC device. Then another person can tap their card to their mobile NFC phone to receive CBDC funds.

Such a stored-value card (SVC) is used to securely store and transfer offline CBDC funds, thus acting as a digital version of cash instead of paper banknotes.  The second option is for consumers to transfer CBDC funds offline by tapping their mobile NFC device to another person’s mobile NFC device. Both payer’s and payee’s mobile NFC devices operate off the network when CBDC funds are sent and received. For this project, IDEMIA and Soft Space provided the tokenisation back-end server, mobile wallet application, card application and SoftPOS solution, as well as all necessary APIs and SDKs for system and application integration purposes.

The project uses IDEMIA’s protocol, the industry standard for Offline CBDC Payments, and leverages on Soft Space’s expertise in contactless payments. Furthermore, the press release also highlights that this JCBDC project is aimed at ensuring that CBDC fund transfers can be done securely and conveniently, by anyone, at any time, with or without Internet connectivity, with an immediate guarantee of fund availability. JCB, IDEMIA, and Soft Space are set to implement the second phase of the project and conduct a pilot in early 2024.

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