MNI POLICY: BOJ Forms Digital Currency Group To Study CBDC

     TOKYO (MNI) - The Bank of Japan has announced the creation of a "Digital

Currency Group" in the Payment and Settlement Systems Department to accelerate

research on a central bank digital currency.

     In January, the BOJ, five other central banks and the Bank for

International Settlements established a group to examine the possibility of

using central bank digital currencies.

     In February, the BOJ formed a research group in the department and the bank

has since been exchanging opinions through related entities and domestic subject

experts.

     The bank decided to promote the initiative to the status of a "Digital

Currency Group" to further examine digitalization and the potential of central

bank digital currencies.

     The group is headed by Akio Okuno, deputy director-general at the

Department and the former head of the policy planning division in the Monetary

Affairs Department.

     The BOJ has previously said the bank lacks a concrete plan to issue a

digital currency, but is now promoting research in preparation for any potential

move in this direction 

     Regarding the merits of a central bank-issued digital currency, BOJ Deputy

Governor Masayoshi Amamiya had said in February that "CBDC's can help remove

barriers of person-to-person payments and significantly improve the

interoperability between different types of private digital money."

     But he also cautioned that a central bank-issued digital currency "could

suppress private business and discourage innovations," indicating the benefits

and drawbacks of such a move need careful consideration.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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