BoJ Deputy Governor: No Need To Launch CBDC Prematurely, Understand Risks And Benefits

According to Bank of Japan’s (BoJ) Deputy Governor Masayoshi Amamiya, central banks should have a better understanding of what digital currencies can bring.

He also said central bank digital currencies (CBDC) can facilitate the way in which private money is flowing and settlements are being streamlined, all while encouraging innovation in the private financial and banking sectors.

“When countries consider issuing central bank digital currencies, they must conduct a comprehensive study on how it affects their settlement and financial systems.”

More Advanced Economies Don’t Have a CBDC Urgency

Amamiya also commented that Japan, since it is not an emerging economy, doesn't feel the need to quickly jump into launching a CBDC. Emerging economies have more a more dire need to get a digital currency backed by the central bank to its citizens to control money laundering.

He did explain that, at the moment, the BoJ is going to have a research team for CBDCs. This team will collaborate with researchers from other countries. He made back in January the allusion that the bank is already working on research with central banks from the UK, the EU, Switzerland, Canada, and Sweden.

Ruling Party in Japan Enthusiastic About Digital Currencies

BoJ Deputy Governor Amamiya isn’t the only Japanese official to take a proactive stance when it comes to his country issuing a digital currency. Other officials, including the Liberal Democratic Party’S (LDP) head of banking and finance systems research commission, Kozo Yamamoto, said Japan should have the digital yen in the next 2 or 3 years. Here are his exact words on the matter:

“The sooner the better. We’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years.”

Many other members of the LDP have expressed their openness to the BoJ issuing a digital currency, especially, when China announced it was going to launch a digital yuan this year.