Japan’s only international payment brand JCB has launched the “JCBDC” (JCB Digital Currency) Phase 2 pilot project with IDEMIA and fintech company Soft Space.

In Phase 1 of the JCBDC project, JCB, IDEMIA, and Soft Space developed a CBDC (Central Bank Digital Currency) payment solution, enabling merchants to accept CBDC without the need to modify their POS (point of sale) terminals and payment cards.

This solution was successfully piloted in Tokyo in 2023, which has enabled JCB, IDEMIA, and Soft Space to proceed to the next phase of the project.

In Phase 2 of the JCBCD project, customers will 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.

This project is compliant with the open WLA (White Label Alliance at https://wla-payment.org/) payment standard and using secure elements to ensure optimal security.

• In one option, consumers can 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 in lieu of paper banknotes.
• Another option for consumers is 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.

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 will implement the second phase of the project and conduct a pilot in early 2024.

“Our teams are proud to be taking part in this project, alongside JCB and Soft Space, which highlights IDEMIA’s expertise and capacity for innovation in terms of CBDCs,” said Romain Zanolo, IDEMIA Managing Director APAC Payment Services. “We are convinced that allowing the public to transfer funds offline either with their contactless card or with their mobile phone will give them a great flexibility of choice.

“With this new phase, we continue to build on the expertise gained from previous successes with central banks across the world.”