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According to the Reuters report, Bank of Japan’s Governor Haruhiko Kuroda on Tuesday stressed the need for the country’s central bank to “prepare thoroughly” for the time it may need to issue its own digital currency. The BOJ will begin experiments on a central bank digital currency (CBDC) in late 2021, Kuroda said, signaling its resolve to stay in line with other central banks that are stepping up the pace of development.
BOJ currently has no plan to issue CBDC.
Bank of Japan’s governor noted that while the BOJ currently has no plan to issue CBDC, central banks must not wait idly until the need to roll out their own digital currency arises. “From the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems, it’s important to prepare thoroughly to respond to changes in circumstances in an appropriate manner,” Kuroda said. The BOJ said last October it will begin experimenting in 2021 on how to operate its own CBDC, joining efforts by other central banks to catch up to rapid private-sector innovation.
China leads in issuing a central back-backed digital currency.
The People’s Bank of China has been working on its national digital currency for a long time, and it has successfully trialed the digital currency in several major cities. As reported earlier, Beijing distributed 10 million yuan in digital red packets, each worth 200 yuan (US$31) via a lucky draw each in February. The city of Suzhou distributed 30 million yuan last month as part of its second trial of the digital yuan. Several other countries are also actively exploring CBDC options. As reported earlier, India is also planning to issue a framework for a digital rupee.