A senior ruling party official has said Japan must revise a law stipulating the central bank of Japan’s mandate and responsibilities to issue a central bank digital currency (CBDC).
October 12, 2020 | AtoZ Markets – Kozo Yamamoto, head of the Liberal Democratic Party’s council on financial affairs, said that the country must revise a law stipulating the Bank of Japan’s mandate and responsibilities in order to issue a digital yen.
Japan must revise BOJ law to issue a CBDC
Any revision to the BOJ law would be a good opportunity to consider making other changes such as adding job creation to the central bank’s mandate, the senior official said. Like the U.S. Federal Reserve, the BOJ should set job creation and inflation as its mandate, and the new law should also clarify that 2% inflation is the BOJ’s policy target, he told Reuters.
As AtoZ Markets reported, the Bank of Japan said it has drafted a plan for a central bank digital currency. The bank says it will start testing ‘as early as possible’ at the beginning of FY 2021, which starts in April. The experiments will be part of the central bank’s efforts to look more closely into how it can issue general-purpose CBDCs, intended to be used widely among the general public, including companies and households.
Central banks eye CBDCs
Central banks in many countries have shown interest in CBDCs, and many of them are working actively on the same.
The People’s Bank of China (PBoC) has been working on its centralized digital currency from the last 5 to 6 years. China’s central bank is now all set to issue the digital yuan dubbed as DCEP (Digital Currency Electronic Payment). The PBoC is currently testing its central bank-backed digital currency in four cities. China is all set to become the first major nation to its centralized digital currency.
However, China is not the only country that is actively developing its digital currency. Central banks around the world are researching and running pilot projects to get in the race to launch their CBDC. As AtoZ Markets reported, the central bank of Canada is planning to launch CBDC.
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