Japan prepares for possible launch of digital currency

Japan prepares for possible launch of digital currency

Japan prepares for possible launch of digital currency


 

Haruhiko Kuroda, governor of the Bank of Japan (BOJ), has said the central bank must “prepare thoroughly” for the possible future need to issue a digital yen.

The BOJ has no plans at present for central bank digital currency (CBDC) launch, but Kuroda believes it must be prepared for a change in circumstances that could necessitate one, Reuters reported Tuesday.

“From the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems, it’s important to prepare thoroughly to respond to changes in circumstances in an appropriate manner,” he told a seminar.

Neighboring China’s plan to issue its digital yuan is firmly established, with the project already in the public trial stages.

Similarly, South Korea is working on a digital coin too, having published research for a CBDC project with testing expected later this year.

According to Kuroda, the Japan apex bank will begin experiments later this spring.

The BOJ said last October it will begin experimenting in 2021 on how to operate its own digital currency, joining efforts by other central banks to catch up to rapid private-sector innovation.

The central bank has said it would conduct a first phase of experiments on basic functions core to CBDC, such as issuance and distribution, early in the fiscal year beginning in April.