Public support needed to launch a CBDC in Japan

According to an official from the Bank of Japan, the central bank won’t be able to launch a CBDC without public support

Just around a week ago, the Bank of Japan (BoJ) announced it was considering a CBDC test sometime next year. The bank already created a team that would expedite the viability of a virtual currency in the country. However, based on a statement from the bank’s top official, the BoJ will not launch the virtual currency if public support isn’t factored in.

Other reports emerging suggest that Japan feels no urgency in launching a CBDC. According to the payment system head at the Bank of Japan, Kazushige Kamiyama, the bank is yet to decide on whether or not to launch a sovereign digital currency.

Kamiyama also noted that the bank must first gather the opinion and support of Japan’s citizens on the matter before proceeding to develop a digital yen.

There is a notion that central banks are afraid of cryptocurrencies like Bitcoin. At the beginning of October, the Bank of International Settlements published a paper revealing the reason behind the rush from central banks around the world to adopt CBDCs; they fear Bitcoin. They particularly fear that Bitcoin could disrupt already established financial and monetary policies.

Kamiyama explained that if the BoJ agreed to launch a digital currency, it will have to ensure that the currency can coexist with paper currency as well as other payment forms.

Currently, the Bahamas and China lead the way in terms of CBDC adoption. The Bahamas fully deployed its sovereign virtual currency dubbed Sand Dollar last week, making it the first country to adopt a CBDC beyond its pilot program. China, on the other hand, is laying a regulatory foundation for digital yuan adoption.

The US is still lagging on the subject. Speaking in a panel hosted by the International Monetary Fund, the Federal Reserve Chairman, Jerome Powell, stated that the country should be more interested in getting CBDC adoption right, rather than being the first country to adopt a virtual currency.