Bank of Japan Governor Warns the Central Bank Must ‘Prepare Thoroughly’ to Launch a Digital Yen
Bank of Japan (BOJ) governor confirms the central bank will start experimentation of its digital currency in spring 2021.
In a report by Reuters, BoJ head, Haruhiko Kuroda, said on Tuesday that the central bank is looking to start experimentation on a digital currency in the coming month. He further commented that the bank is not looking to launch its digital yen any time soon – stressing the bank needs to “prepare thoroughly” when the time comes.
Governor Kuroda confirmed the central bank is looking to start its experiments in a CBDC this spring in a bid to catch up and keep up to tabs with other countries such as China, which has already begun trials on its own digital yuan.
In a race to catch up with China, the Bank of Japan announced 30 major firms would join a trial phase to help the bank create its own CBDC. However, according to Kuroda, the bank is still a long way from launching its digital token, saying the current trials aim at helping the bank understand the effects of a digital yen on the economy.
“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.”
In October, Kenji Okamura, vice-finance minister for international affairs, spoke on the dangers of being left out in the digital currency space (referring to China’s progress in launching a CBDC). According to a document released by the BoJ, the digital currency will take two forms, the general-purpose CBDC and the wholesale CBDC.