Japan must swiftly revise laws to allow the central bank to issue a digital currency, a move that could provide a chance to reform the Bank of Japan¡¯s existing mandates and enshrine its inflation target, a senior ruling party official said Monday.
Kozo Yamamoto, head of the Liberal Democratic Party¡¯s council on financial affairs, said the BOJ risked being overtaken by private players who could launch their own digital currencies that could undermine the yen. ¡°If something too convenient pops up from the private sector, people might start to doubt whether they need yen as a currency unit. We must prevent this from happening,¡± he said. ¡°This is fundamentally about protecting Japan¡¯s currency sovereignty.¡±
Yamamoto said he would prod the government and relevant agencies to speed up efforts to draft a revised BOJ law and other necessary legislation for issuing central bank digital currencies (CBDC).
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