Tokyo, Dec. 15 (Jiji Press)–Envisaged central bank digital currencies, a new payment method studied by the Band of Japan and other central banks, would enable lower settlement costs, Kazushige Kamiyama, a senior BOJ official, said in a recent interview.
“CBDCs will make the functions of cash, which can be used by anyone and at any time with a sense of security, available in digital form,” said Kamiyama, director-general of the Japanese central bank’s Payment and Settlement Systems Department.
“Settlement fees will become lower,” he said.
Kamiyama expressed concerns that the ongoing competition among privately run settlement services via smartphones has made the environment less friendly for users.
“Users wonder which service to choose whenever they make settlements. Sometimes, the services they choose are not available (at stores),” he said.
On stores that accept digital currencies, Kamiyama noted, “Contracts with various digital settlement service providers impose heavy burdens on store operators.”
As the BOJ is likely to manage transaction records for CBDCs, commissions can be lower than those of existing private-sector settlement services, Kamiyama said. He thus indicated the possibility of operational management costs for settlement service providers being reduced, leading to lower commissions paid by stores.
The BOJ started demonstration tests for CBDCs in April but has yet to decide on their issuance. If they are introduced, the BOJ will “undertake the issuance of digital currencies, the management and operation of the ledger and the formulation of operational rules,” he said.
Private-sector businesses are expected to provide digital currencies to be issued by the BOJ to users by such means as apps, according to Kamiyama.
