June 6, 2023

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

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1 min.

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

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 increase the convenience of payments for users, as CBDCs are an integral part of increasing financial inclusion and speeding up international transfers. Stablecoins, cash, bank deposits, and digital currencies are vying for the lead, but it is essential to play to the strengths of all instruments. This will improve the stability and security of Japan's payment system, the official said.

“When the digital currency of the central bankfreely convertible to other forms of money and vice versa, this ensures uniformity. In other words, balance is maintained when one yen equals one yen regardless of the payment instrument,” Kuroda explains.

The Bank of Japan began testing the digital yen in2020 by entering into an agreement with several private firms for this. The digital yen pilot project will not become fully centralized and will rely heavily on the results of previously completed proof-of-concept (PoC) testing. Recently, the Bank of Japan announced that it would pilot its own digital currency in April.

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