Crypto-Yen: Bank of Japan must be "ready to respond"

Credit: Wikimedia Commons – Bank of Japan headquarters in Tokyo

According to his vice-governor, Masayoshi Amamiya, the central bank of japan must be prepared to issue a Yen in digital form (CBDC). But such a launch would only happen if conditions are met.

The question for central bankers no longer seems to know whether or not to consider launching a central bank digital currency, but rather when. The Japan participates in an international working group on the subject of CBDC.

The objective is thus at this stage to advance the reflection and to prepare. And the vice-governor of the Bank of Japan, Masayoshi Amamiya, is very clear on this point: no immediate launch of a crypto-Yen is being considered – even though a group of 70 legislators from the Japanese Liberal Democratic Party are calling for the creation of a digital yen.

No immediate launch of a crypto-Yen

For the senior official, several aspects of CBDC have yet to be reviewed before such a decision is made, such as the impact of such an electronic money on a state’s monetary policy.

Masayoshi Amamiya would like to stress, however, that these reflections are not a delay. The vice-governor insists that it is "very important" for the central bank of Japan to continue examining the possibility of issuing CBDCs.

Conditions will, however, determine the timing of a possible issue of a CBDC. For the BOJ leader, innovation is progressing very quickly. Nonetheless, it is the evolution of settlement systems and the demand from citizens for CBDCs that will be the real triggers.

Citizen demand could soar

However, this request could "fly to Japan" notes Masayoshi Amamiya, who therefore supports the need to advance work around digital currencies so as to be prepared to "respond" to this public expectation.

Japan is therefore one of the 80% of central banks surveyed by the Bank for International Settlements (BIS) currently examining this technology. However, only 10% plan to launch a cryptocurrency within three years – and 20% within six years.

The placing on the market of Libra – still uncertain – could accelerate these calendars, as its announcement by Facebook hastened the reflections of central banks on the subject. The availability of a digital currency intended for the mass market is indeed likely to develop uses and expectations of consumers.