Japan Should Collaborate With U.S., Europe on CBDC Standards: BOJ

The governor of the Bank of Japan Kuroda Haruhiko said Friday that Japan must collaborate with the U.S. and Europe to work on possible CBDC norms.

The cooperation must look into creating global standards on technical aspects of a central bank digital currency (CBDC), he said.

How Close Is Japan to a digital yen?

Speaking during a parliament session, the governor said that Japan is “proceeding with experiments” and a plan to consider a specific design of CBDC, Reuters reported.

Japan hasn’t decided yet on whether to issue a CBDC or not. The decision might follow after close consultation between the BOJ, government and private entities, he said.

He also answered a lawmaker’s question that the country may be able to decide on a CBDC around 2026.

“What’s most important is for the idea to get sufficient understanding by the public,”

Kuroda said at the parliament gathering.

Tokyo is closely watching its rival China’s “fast-paced” digital yuan developments, Finance Minister Shunichi Suzuki said during the parliament session.

Japan’s CBDC Moves

It all started in April 2021 when the Bank of Japan started its first phase of CBDC trials. The bank’s executive director Shinichi Uchida said that if there is a CBDC roll out anytime soon, it would need to co-exist with private-sector payment services.

The private sector was quick enough to respond to this idea, forming a consortium of approximately 70 Japanese firms and three of Japan’s mega-banks – Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc, and Sumitomo Mitsui Financial Group Inc – to launch a yen-pegged digital currency.

It is important to note that the consortium had an end goal of launching the digital currency – dubbed DCJPY – by fiscal 2022. The consortium has been pushing the launch sooner, as the pandemic has been driving-away cash usage in the country, encouraging the people to look for digital money options.