The Bank of Japan, the country's central bank, is actively researching the digital currency sector.
Haruhiko Kuroda, the head of the central bank, spoke aboutthis in an interview with Reuters. Kuroda added that to date, the Bank of Japan has no plans to create its own digital currency, but in the future, if necessary, they may consider this option.
The official is also not interested in stablecoins. In his opinion, their release is impractical, at least until a mechanism has been developed to ensure risk management.
The global adoption of stablecoins can affect monetary policy and the stability of the financial system as a whole, Kuroda notes.
Bank of Japan previously raised the issue of financialstability regarding the development of digital currencies and stablecoins. In April 2018, Deputy Chairman of the Bank of Japan Masayoshi Amamiya said that the issuance of digital currency could have a “significant impact” on the “two-tier currency system of the country and the financial intermediation of banks.”
More recently, Amamia said the central bank has no plans to issue digital currencies yet, in part due to the impact on commercial banking.
If the central bank’s digital currencies replace private deposits, this could destroy the credit channels of commercial banks and have a negative impact on the economy, Amamia said then.