Bank of Japan: No Public Demand for National Digital Currency Currently

In recent months, many countries have expressed their views on digital currencies. For example, China announced plans to create its own national digital currency, and Japan has also made statements regarding digital currencies.

Bank of Japan Governor Haruhiko Kuroda stated that there is currently no public demand for central bank digital currency (CBDC) in Japan.

During a speech at the 35th anniversary seminar of the Center for Financial Industry Information Systems (FISC), Kuroda discussed the challenges posed by global private stablecoins and CBDCs. He concluded that there is currently no reason to issue a CBDC in Japan, explaining:

In Japan, the amount of cash in circulation is still increasing, and there seems to be no public demand for CBDC at the moment. Nevertheless, the Bank of Japan has been conducting technical and legal research on the matter to be prepared in case the need arises in the future. We also need to study the impact of CBDC on financial intermediaries.

Bank of Japan Promotes Private Digital Currencies

Although the central bank governor has not found a reason to issue its own digital currency, he acknowledged the existence of various private digital currencies denominated in yen. Banks are encouraging the use of these private digital currencies and improving them to make their functions closer to those of CBDCs.

One strategy that banks are adopting to promote such systems is increasing the number of non-cash payment users and ensuring interoperability among multiple payment service providers. In October, the central bank launched a reward program for customers using non-cash payments to enhance the productivity of related businesses.

However, when it comes to global stablecoins like Facebook's Libra, Kuroda expressed a more cautious stance. He said:

If legal certainty and technical stability can be ensured, global stablecoins like Libra, also known as GSC, can provide convenient payment services for many users. However, users cannot understand the advantages of GSC unless various challenges and risks related to money laundering, cybersecurity, data protection, and consumer and investor protection are correctly addressed.

Therefore, stablecoins cannot begin operating in Japan until the challenges and risks in terms of legal and supervision are addressed. He pointed out that in a world with stablecoins, it is crucial for regulatory authorities around the world to cooperate and maintain financial stability through free capital flow.

Meanwhile, countries around the world are actively researching public and private digital currencies and stablecoins, which can be seen as a significant challenge to traditional finance, but may also imply a more advanced future.

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