Haruhiko Kuroda: “Central bank digital currencies are a great addition to the financial system”

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The Governor of the Bank of Japan believes that the central bank's digital currency should function in conjunction with other payment mechanisms to improve the country's financial ecosystem.

Haruhiko Kuroda stated thatGovernment stablecoins can improve the payment experience for users, as CBDC is an integral part of increasing financial inclusion and speeding up international transfers. Stablecoins, cash, bank deposits and digital currencies are competing for leadership, but it is critical to play to the strengths of all instruments. This will increase the stability and level of security of the Japanese payment system, the official is confident.

“When a central bank digital currencyeasily converted into other forms of money and back, this ensures uniformity. In other words, the balance is maintained when one yen is equal to one yen, regardless of the payment instrument,” explains Kuroda.

The Bank of Japan began testing the digital yen in2020, having entered into an agreement with several private companies for this purpose. The Digital Yen Pilot will not be completely centralized and will rely heavily on the results of previously completed proof of concept (PoC) testing. The Bank of Japan recently announced that it would pilot its own digital currency in April.

A few years ago, Haruhiko Kurodahad a different opinion about government cryptocurrencies. He said that there was no demand in the country for the Central Bank’s digital currency and was afraid of the risks associated with it.