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 central bank-backed digital currency. 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.
The Bank of Japan will start experimenting with a CBDC.
In a report laying out its approach on CBDC, the Bank of Japan said it would conduct the first phase of experiments on basic functions core to CBDCs, such as issuance and distribution, early in the fiscal year beginning in April 2021. 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 across countries continue to experiment with CBDCs.
Central banks in many countries have expressed interest in CBDCs, and many of them are working actively on the same. The People’s Bank of China (PBoC) is all set to become the first major nation to launch its national digital currency. PBoC has been working on its national digital currency, dubbed DCEP, for the last five to six years and is now very close to issuing it to the general public. As reported earlier, the Bank for International Standards revealed that CBDC was more searched than bitcoin and Libra this year.