- A senior official at the Bank of Japan stated that the move to launch a digital currency depends on public support.
- These remarks indicate that although the Bank of Japan has not determined the issuance of digital currency.
- The new coronavirus epidemic has further accelerated the popularity of cashless payments in Japan and around the world.
According to reports, a senior official at the Bank of Japan (BOJ) stated that the move to launch a digital currency depends on public support. He said that although the Bank of Japan has announced that it will start testing digital currencies next year, it still has not made a final decision on this matter.
Kazushige Kamiyama, head of the bank’s payment system department and responsible for researching the digital yen project, said “there is no conclusion yet. In the final analysis, we cannot continue to advance without the full understanding of the Japanese public.”
Kazushige Kamiyama added that if the Bank of Japan issues a digital currency in the future, its main goal is to enhance the transaction ecosystem and allow coexistence with cash and other forms of electronic payment, rather than becoming a monetary policy tool.
These remarks indicate that although the Bank of Japan has not determined the issuance of digital currency, it still intends to have a deep understanding of how this digital currency works and the conditions that must be met to promote the central bank digital currency (CBDC) project.
Although the People’s Bank of China has not issued a specific plan for a digital renminbi, it has increased the interest of central banks and policymakers around the world in digital currencies.
The discussion of stable currencies such as Facebook Libra has also made people feel that there are more and more conventional cash competitors, which may have a wide-ranging impact on the operation of the financial industry.
The Finance Ministers of the Group of Seven (G7), the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) have all issued reports or statements on this in the past month. Federal Reserve Chairman Jerome Powell said this week that about 80% of central banks are exploring the idea of issuing CBDC.
Kazushige Kamiyama said that the Bank of Japan is conducting in-depth research on this, hoping to improve the efficiency of the Japanese payment system, but it did not focus on strengthening monetary policy. However, there is currently a view that CBDC can help curb deflation.
“There is no conclusion yet,” he said. “At the end of the day there’s no way we can proceed without gaining sufficient understanding from the Japanese public.”
The new coronavirus epidemic has further accelerated the popularity of cashless payments in Japan and around the world, indicating that people are increasingly eager for more convenient alternative transaction solutions.
Kazushige Kamiyama said that in order to expand the potential use of digital currencies, even non-bank institutions such as financial technology companies can play an intermediary role.
He believes that it should be discussed whether these companies should also set up accounts in Japanese banks.
Kazushige Kamiyama said that the Bank of Japan needs to keep up with the People’s Bank of China to become the first major central bank to issue digital currencies.
“We have clearly stated that banknotes and digital currency will coexist,” Kamiyama said. “The digital currency won’t be useful to deepen negative rates because there will be banknotes,” to which the rates can’t be applied, he said.