Central Bank of Japan’s Governor: No Current Demand For A Digital Currency, But We Will Be Ready
Haruhiko Kuroda, Bank of Japan’s (BOJ) governor has said a central bank digital currency (CBDC) is not at all in demand in Japan.
The governor held a speech at the 35th Center for Financial Industry Information Systems anniversary symposium, on December 4. He talked about how many challenges CBDCs and stablecoins are facing, only to conclude there’s no point in Japan issuing a CBDC at the moment:
“In Japan, the amount of cash outstanding is still increasing, and it does not seem that there is a demand for CBDC from the public at present. Nevertheless, the Bank of Japan has been conducting technical and legal research on this matter in order to stand ready when the need for CBDC 13 may arise in the future. The Bank also needs to study the impact of CBDCs on financial intermediation.”
BOJ is a Promoter of Digital Currencies
While not seeing any reason for issuing a CBDC, the bank governor still admits there are digital money being denominated in the Japanese yen.
Furthermore, BOJ encourages people to use private digital currencies and wants the crypto space to improve, not to mention it’s trying to get its features close to what CBDCs have to offer.
For example, it’s looking to increase the number of users making cashless payments and to ensure interoperability between many payment service providers. Back in October, it has launched a rewards program for its customers conducting cashless payments, trying to increase productivity for the relevant businesses.
The Bank Wants to Be Cautious When It Comes to Stablecoins
As far as the global stablecoins like Libra from Facebook are going, Kuroda said BOJ wants to be cautious:
“Global stablecoins (GSCs), such as Libra, may offer convenient payment services to many users, if legal certainty and technical stability are ensured. However, users cannot continuously appreciate the benefits of GSCs unless various challenges and risks related to money-laundering, cyber-security, data protection, and consumer and investor protection are properly addressed.”
He also mentioned that GSCs shouldn’t begin their operations if they aren’t regulated, legal and have addressed all the risks and challenges involved. Furthermore, he said authorities all over the world should work together in order to maintain financial stability when it comes to free capital mobility in the stablecoins’ world.
In the meantime, many countries are more and more looking into stablecoins and private digital currencies. As reported yesterday, LifeLabs has announced the development of the BVI~LIFE stablecoin that’s backed by the US dollar and created as part of a collaboration with the British Virgin Islands.