Hiromi Yamaoka, former head of the payment and settlement systems department at Bank of Japansaid It will likely take the country several years before it can issue central bank digital currency.
In a Reuters interview on November 17th Yamaoka said the Bank of Japan was concerned that a CBDC could trigger massive outflows of private bank deposits.
Yamaoka, who is now chairing a group of banks looking to build a common settlement infrastructure for digital payments, argued so “There’s no point in issuing a CBDC if it’s not widely used.”in the following words:
“The fundamental and very sensitive question is how to ensure that private deposits and a CBDC coexist. You don’t want money flowing out of personal deposits. On the other hand, there is no point in issuing a CBDC if it is not widely used. “
To mitigate the risks of private deposit outflows by CBDC, The BoJ may consider limiting an individual company’s CBDC involvementYamaoka said. However, such limits could also trigger conversion fluctuations from one CBDC to other forms of money. which would ultimately make payments and billing less convenient, he showed.
Yamaoka said that too The Bank of Japan and the private sector are working together to make digital business more convenient. He stressed that the private sector plays a “key role” for the interoperability of different settlement platforms.
Yamaoka’s remarks come shortly after the BoJ released a report on CBDC. Announced plans to run the first digital yen pilot programs in 2021. Mid-October Kenji OkamuraJapan’s deputy finance minister for international affairs said so Japan is not concerned Why countries like China take advantage of pioneering the development of a CBDC. “I don’t think a single digital currency will dominate the world,” said Okamura.