A political figure who heads a panel on digital currencies for Japan's ruling party has said his country will have a better idea of what to expect from a digital yen by the end of 2022.
The official also said more details on the CBDC's design may kick up a debate on how its issuance could impact financial institutions. The concerns run contrary to the Bank of Japan's conclusion that a digital yen would not adversely affect private businesses provided they were designed appropriately.
Murai said commercial banks would stand to benefit from a shift back to the bank's control over customer data and business, Reuters reported.
“If the BOJ were to issue CBDC, it would have a huge impact on financial institutions and Japan’s settlement system,” said Murai as cited in the report. “CBDC has the potential to completely reshape changes occurring in Japan’s financial industry.”
In March, the Bank of Japan launched a liaison and coordination committee ahead of its plans to conduct an “initial experiment” or proof-of-concept phase in April. While the central bank stressed it was not yet ready to implement a CBDC, the latest comments from a public official demonstrate a willingness to pursue the issue further.
China, which currently leads the world in CBDC experimentation and implementation, has been trudging along with its efforts to digitize its national currency. China expects to have some parts of its CBDC in circulation by the time the Winter Olympics in Beijing rolls around in February next year.
The Bank of Japan, however, does not view this as a threat to the U.S. dollar and its status as a global reserve currency, according to previous reports – though the bank's plans to push ahead with a CBDC indicates it is, at least, keeping China's plans firmly on its radar.
“If a digital yuan becomes so convenient it’s frequently used by tourists or becomes a main settlement means for trade, the relationship between the yen and yuan could change” degrading the yen’s status as a safe-haven currency, said Murai.
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.