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Despite the fact that many nations are moving towards understanding cryptocurrencies and their underlying blockchain technology, Japan has remained skeptical of it. The Governor of the Bank of Japan, Haruhiko Kurado, had previously said that the bank had no intention to issue a digital currency, conceding that it has been researching on crypto-assets. Kurado is in the news again after in his latest speech he said that there was no demand for state-backed digital currencies in the country.
Kurado made this statement as he delivered a speech at the symposium for the 35th anniversary of the Center for Financial Industry Information Systems on 4 December. The Governor noted the challenges posed by private global stablecoins and said,
“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. The spread of GSCs could have significant implications on the financial system and the transmission of monetary policy.”
The Governor went on to say that the amount of cash outstanding in Japan has been increasing, adding that there is barely any demand from the public for a stablecoin. Kuroda added,
“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.”
Kuroda also spoke about Libra, noting that it could only help when it will be legalized and technicalities are taken care of. He highlighted that no GSC can go into operation until legal, regulatory and oversight challenges, and risks are addressed.