Today, JCB, the Japanese card payment network, announced a proof of concept for a central bank digital currency (CBDC), JCBDC, with IDEMIA and Malaysian fintech Soft Space. The goal is to demonstrate that CBDC can be used with existing payment cards and payment infrastructure. Tokyo merchants will test the solution during the first three months of 2023.

JCB also announced a second project for machine-to-machine (M2M) offline payments, which could potentially be used for CBDC.

For the first project, Soft Space has an application, ‘Tap on Mobile’, which allows mobile phones to act as point of sale terminals with debit and credit cards. Thus, payment card CBDC payments will be routed through the conventional card network and eventually to JCB’s blockchain-based CBDC network.

While most CBDC solutions focus on mobile wallets, not everyone has a smartphone, and sometimes cards can be more appealing.

IDEMIA, a project partner, was recently one of the winners of the G20 TechSprint for CBDC for an offline wallet solution.

The second project for offline machine-to-machine (M2M) payments is an extension of an existing initiative with enterprise blockchain startup Keychain. Together they have been working on a layered payment solution with a network sitting between the cloud and physical devices.

This middle layer provides scalability with large volumes of micropayments and makes it less centralized, with the use of blockchain to enable secure recording of payment history. Devices such as routers or servers close to the user perform the authentication function even if the central payment platform is offline.

Now that this project is nearing production, Toppan Forms is getting involved to enable the project to embed an authentication function in chip-based IC payment cards and payment terminals, two areas in which Toppan specializes. The keychain provides authentication or digital identity using the blockchain.

JCB has been working on blockchain solutions for years. In 2019, it partnered with blockchain B2B payments company Paystand. More recently, it has been exploring blockchain interoperability with Datachain for digital currency exchange.