In the midst of increased interest in cryptocurrencies by policymakers and central banks due to China's intentions to issue a digital yuan, a Bank of Japan official said that the bank's move to launch a cryptocurrency would depend on public support, reported the Bloomberg.
"At the end of the day, there is no way to proceed without getting enough knowledge from the Japanese public," said Kazushige Kamiyama, who heads BOJ's payment systems department.
In the event that the central bank later makes a digital unit, Kamiyama indicated that it would seek to strengthen the transaction ecosystem and would exist alongside cash and other types of digital payments instead of a monetary policy mechanism.
"We have clearly emphasized that banknotes and digital currency will coexist," said Kamiyama, noting that the cryptocurrency will not be "useful for deepening negative rates" since the banknotes will exist.
COVID-19, for its part, continued to accelerate the use of non-cash payments in the country and elsewhere, illustrating the growing desire for different and easier ways to transact.
Although the Bank of Japan does not have an immediate timeline for issuing cryptocurrencies, the central bank's deputy governor indicated in January that he should analyze the potential and be ready.
If the technology gains increased public interest, said Masayoshi Amamiya at the time, there may potentially be a need to issue digital coins from the central bank (CBDC).
There are still a number of details that have to be analyzed before a CBDC can be issued, with issues that remain such as its impact on monetary policy and ensuring the application of specific and strong security rules.
However, he stressed that he considered it "very important" that the BOJ continues to analyze the viability of the circulation of the CBDC.
In other CBDC news, the Federal Reserve is working together with seven other central banks and the Bank for International Settlements (BIS) to set up a framework that would facilitate the path for issuing digital currency.