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BOJ’s digital currency scheme to be included in Japan’s basic economic and fiscal policies

  • July 15, 2020
  • , Nikkei , p. 1
  • JMH Translation

The Japanese government will include the study of a central bank digital currency (CBDC) as part of its Basic Policies for Economic and Fiscal Management and Reform, sources have revealed. The Basic Policies are to be approved by the cabinet soon. In January 2020, the Bank of Japan began joint research on a CBDC with five foreign central banks, including the European Central Bank (ECB). The Japanese government will also step up CBDC discussions with the U.S. and European governments.


The Basic Policies state that the Bank of Japan will begin verification tests for a technical survey [of digital currency] and that the BOJ will “consider the matter with the cooperation of various countries.” The Basic Policies form the basis of Japan’s economic and financial policies. A mention of CBDC in this document tells domestic and overseas audiences that the Japanese government will initiate concrete discussions on introducing a CBDC.


Up to now, the BOJ has taken the position that it has “no plans to issue a digital currency at present.” At the same time, however, the BOJ is proceeding steadily with preparations for implementation. In January 2020, the BOJ started joint research with the Bank for International Settlements (BIS) and five central banks, including the ECB and the Bank of England. The BOJ set up an internal team in February 2020 and released a report of major discussion points in July 2020.


The decision to issue a CBDC rests with the government, not the BOJ. The Bank of Japan Act, which is under the jurisdiction of the Ministry of Finance, provides that the BOJ issues bank notes. A revision of the Bank of Japan Act is anticipated if the decision is made to issue a digital currency. Involvement of the government signifies that the digital currency scheme has moved forward.


The Japanese government has a plan to step up discussions regarding a CBDC with the finance authorities of various countries. It is thought that the government will discuss technological standards, timing of issuance, and international cooperative frameworks mainly with the U.S. and Europe. (Abridged)

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