Bank of Japan governor, Haruhiko Kuroda, has said that although it is a good idea to have the CBDC, the central bank must prepare well before implementing the strategy. He said that the bank would start to work on its digital currency this year.
Many countries have been thinking about digital alternatives since the outbreak of COVID 19. Therefore, most central banks are looking into how they can use cryptocurrencies in making payments and settlements. Many of them have commissioned studies and researches on using cryptos for payment and settlement. So far, a few central banks have issued their own CBDC. But not all central banks see a good reason for developing such currencies.
For instance, Japan’s central bank has no plans to launch its version of a digital currency, but it has carefully been looking at CBDC’s to keep pace with what other central banks are doing and prepare in the event the need arises.
It is why Kuroda said in one of the seminars that the bank might start experimenting with its first digital currency in 2021. Reuters reported that the BOJ governor had indicated that it was important that the bank prepare well on the cryptocurrency so as not to be found off guard by the time the need arises. Therefore, BOJ is doing everything that other banks are doing in developing CBDC.
In a nutshell, the central banks should not sit there and wait. But they should instead plan how best they could do it when needed. They must prepare well, including ensuring stability and efficiency of settlement payment systems. According to the BOJ governor, they must prepare well to respond to circumstances and any other changes appropriately.
Note that the BOJ has since last year been studying CBDC. But for now, the bank does not see a good reason why it should issue a digital currency. However, last year, around October, the regulator said that it would start experimenting with how it would issue and operate its digital money by 2021.