TOKYO (Reuters) – Japan will look closer into whether to issue central bank digital currencies (CBDCs), the government said in its annual policy roadmap, a sign that Tokyo may be warming to the idea as the coronavirus heightens demand for cashless payments.
In its first-ever reference to digital currency in the annual plan, the government urged the Bank of Japan (BOJ) to liaise with other countries to jointly examine its feasibility.
“The BOJ will coordinate with other countries to consider CBDCs by examining and verifying technological tests,” according to the document, which serves as guidance for the government’s long-term economic and fiscal policies.
Facebook’s efforts to launch its Libra cryptocurrency stablecoin have forced central banks to look more seriously into issuing their own digital currencies.
China has been among countries leading in the drive toward issuing CBDCs, prompting some Japanese ruling party lawmakers to urge Tokyo to catch up.
However, the government and the BOJ have been cautious about moving too quickly given the legal barriers and social disruptions it may cause in a country that has the most cash-loving population in the world.
Still, the pandemic may add momentum to calls for Japan to look into CBDCs more seriously, if more people avoid handling hard cash, and to move towards digital settlement, analysts say.
While the BOJ has said it has no immediate plans to issue a digital currency, it is conducting research with other central banks on the issue.
As part of a wider move to boost digital payment systems, the government is seeking a cut in interbank transfer fees. It will review the fees, which have been unchanged for more than four decades, by the current fiscal year end next March, a government official said.
The issue was included in this year’s economic growth strategy that was approved by the cabinet alongside the annual policy plan on Friday.
In the growth strategy, the government said it would make it easier for working people to take on multiple jobs and that it would come up with new rules for freelance work.
Reporting by Tetsushi Kajimoto and Daniel Leussink; Editing by Ana Nicolaci da Costa and Kim Coghill