Bank of Japan Preparing for Digital Yen

Akihabara News (Tokyo) — The largest of all possible players in this country, the Bank of Japan, is preparing for a national cryptocurrency, a digital Yen.

“From the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems,” declared Bank of Japan Governor Haruhiko Kuroda, “it’s important to prepare thoroughly to respond to changes in circumstances in an appropriate manner.”

A team of experts to be appointed by Kuroda will complete the initial phase of “basic function testing” by the end of April. At present, no commitment has been made about a launch date.

In the past, the Bank of Japan under Kuroda’s leadership has expressed caution about issuing a digital Yen. For example, Bank of Japan Deputy Governor Masayoshi Amamiya warned as recently as July 2019 that “if central bank digital currencies replace private deposits, that could erode commercial banks’ credit channels and have a negative impact on the economy.”

However, a fresh sense of urgency seems to be taking hold to move forward in part because neighboring China is aggressively moving toward the issuance of a digital Yuan, and Tokyo has grown worried that it might be falling too far behind its larger rival.

The initiative also fits comfortably with the Yoshihide Suga administration’s priorities of stimulating the digitization of business and government services, as well the move toward a “cashless” society.
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