Japan's Central Bank could issue its central bank digital currency (CBDC) by the end of next year. This was made known by Hideki Murai, who runs the Liberal Democratic Party's panel on cryptos. Murai believes the country would have a clearer picture of what to expect concerning a digital yen by 2022, Reuters reports.
How CBDC Would Affect Financial Institutions
The lawmaker said there is no immediate decision regarding the issuance of a CBDC.“If the BOJ were to issue CBDC, it would have a huge impact on financial institutions and Japan’s settlement system. CBDC has the potential to completely reshape changes occurring in Japan’s financial industry.”Murai also spoke on issues concerning whether the digital yen will supersede or interfere with private business when issued. The country’s financial industry is already facing major changes. This is because non-bank retailers are venturing into the turf of commercial banks by offering various online settlement services. Murai said that if CBDC is designed in a way that makes banks key intermediaries, this could shift business and data away from such retailers back to the banks. Away from internal issues, Murai noted that the Bank of Japan should ensure that the digital yen is compatible with CBDCs of other developed countries. This is to ensure it can compete with China's digital yuan.