Haruhiko Kuroda, an official from the Bank of Japan (BoJ), has revealed that the country’s central bank is researching cryptocurrencies, as per a report on Tuesday.
According to Kuroda, the bank has no plans to issue a digital currency at the moment. However, the development today probably aims at keeping them ready to launch one, if at all they need arises in the future.
On the concept of stablecoins, Kuroda, governor of the central bank, shared a few concerns over the issuance of such digital currencies in the country. He noted that there must be 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.
Notably, banks in Japan and other companies have always shown interest in digital currencies, right from Japan’s banking giant, Mizuho’s announcement to roll out a unique crypto project dubbed J-coin, to the purported approval of a yen-pegged stablecoin by the Cabinet Secretariat of Japan.
With much concern on digital currency, the financial experts at the Bank of Japan released a paper earlier this year that detailed the possible effects of the central bank-backed digital currency (CBDC) in the current monetary system.
The decision to launch CBDCs is now a crucial topic across several countries, thereby resulting in intensive research for different jurisdictions to determine the impacts of replacing traditional fiat currencies with the new tool, CBDC.
Noteworthy, though, is that the official failed to note if the Bank of Japan plans to issue CBDCs to replace banknotes in the future, despite being aware of the supposed benefits of doing so.