Bank of Japan confirms no plans for a Central Bank Digital Currency

Facebook’s stablecoin project Libra was a key topic for discussion at the G20 meeting and highlighted ongoing concerns around the potential for a global stablecoin led by private entities. A major topic of the meeting was whether central banks in each country are investigating the use of blockchain technology and other methods to issue digital currency. Central banks in Norway, Sweden, and Canada are already considering plans.

China appears closest to launching a central bank digital currency. The country has been working on plans for the digital yuan for several years and it is thought that the project is almost ready for launch.

No CBDC for Japan yet

At the press conference, Governor of the Bank of Japan Haruhiko Kuroda said that the Bank of Japan does not currently have any specific investigations ongoing in regard to the issuance of digital currency. However, he expressed an inclination to continue to look at methods that might optimize international payments and remittance as it relates to the Bank for Internal Settlements (BIS).

The BIS established the BIS Innovation Hub in October this year to identify key trends in technology that may impact the work of central banks. One of the purposes for the hub includes research into the possible integration of distributed ledger technology for a central bank digital currency (CBDC) into bank infrastructure. Depending on trends going forward, the research could provide possibilities for new development.

Deputy Governor Masayoshi Amamiya of the Bank of Japan previously dismissed the notion of issuing a digital currency in May last year. Amamiya said that a central bank digital currency might cause confusion and disrupt the status quo of financial systems.