Bank of Japan (BoJ), the country’s central bank, is conducting research on digital currencies, according to an official.
Haruhiko Kuroda, governor of the central bank, announced the news in an interview with Reuters published Tuesday. Kuroda added that the BoJ currently has no plans to issue a digital currency but can do so in the future if need be.
The official is also not keen on stablecoins and believes that these should not be issued unless there is a sufficient framework in place to ensure governance and risk management. “If stable coins backed by companies with a huge customer base are issued globally, that could have an impact on monetary policy and financial system stability," said Kuroda.
The BoJ has previously also raised financial stability concerns related to digital currencies and stablecoins. In April 2018, the BoJ’s deputy governor Masayoshi Amamiya said issuing a digital currency may have a “large impact” on the country’s “two-tiered currency system and private banks’ financial intermediation.”
Most recently, Amamiya said the central bank has no plans to issue digital currencies for now partly due to its impact on commercial banking. “If central bank digital currencies replace private deposits, that could erode commercial banks’ credit channels and have a negative impact on the economy,” Amamiya said at the time.