Amid increased interest in cryptocurrencies from policy makers and central banks due to China’s intentions to issue a digital yuan, a Bank of Japan official said the bank’s move to roll out a cryptocurrency would hinged on public support, Bloomberg reported.
“At the end of the day there’s no way we can proceed without gaining sufficient understanding from the Japanese public,” said Kazushige Kamiyama, who leads the BOJ’s payment system department.
In the event that the central bank makes a digital unit at a later time, Kamiyama indicated that it would seek to bolster the transaction ecosystem and exist alongside of cash and other digital payment types in lieu of a mechanism for monetary policy.
“We have clearly stated that banknotes and digital currency will coexist,” Kamiyama said, noting that cryptocurrency won’t “be useful to deepen negative rates” as banknotes will exist.
COVID-19, for its part, has continued to speed up the utilization of non-cash payments in the country and in other places, illustrating the rising desire for different and easier ways to transact.
Even though the Bank of Japan doesn’t have an immediate timeline to issue cryptocurrencies, the central bank’s deputy governor indicated in January that it should look into the potentiality and be ready.
If the technology garners heightened public interest, Masayoshi Amamiya said at the time, there could potentially be a need for issuance of central bank digital currencies (CBDC).
There are still a number of details that have to be looked into before a CBDC can be issued, with issues remaining like its impact on monetary policy and making sure specific strong security standards are put into place.
However, he stressed he felt believed it was “very important” that the BOJ keep scrutinizing the feasibility of circulating CBDC.
In other CBDC news, the Federal Reserve is working along with seven other central banks and the Bank for International Settlements (BIS) to assemble a framework that would smooth the path to digital currency issuance.