No Plans for National Cryptocurrency, Bank of Japan Official Says
The Bank of Japan said it has no plan to issue a central bank digital currency due to concerns over financial stability.
Bank of Japan (BoJ), the country's central banking authority, currently has no plans to issue a central bank digital currency (CBDC), citing financial stability concerns.
In a closing remark at a conference with the International Monetary Fund and Japan's Financial Services Agency on Monday, the BoJ's deputy governor Masayoshi Amamiya said issuing a digital currency directly for consumers – whether or not on a blockchain – could undermine the existing two-tiered system.
Currently central banks only give access to limited entities such as private banks, which face consumers directly in a second tier – a process that Amamiya praises as "the wisdom of human beings in history to achieve both efficiency and stability in the currency system."
As such the deputy governor moved on explaining that having a digital currency backed by the central bank will change the system without proving to be financially stable.
That said, Amamiya does not entirely rule out the possibility of considering the bank's own cryptocurrency in the future as it has already started looking into the underlying blockchain technology, though currently just for business applications.
As reported before, through a partnership with the European Central Bank, the BoJ has kicked off an initiative called Project Stella, which has recently published research results on how the distributed ledger technology can create new securities settlement mechanisms.
Bank of Japan image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.