Japan requires to adapt its laws to issue a CBDC [central bank digital currency], consistent with the native financial officials.
As per the head of the Liberal Democratic Party’s council on financial affairs and a former official at the Ministry of Finance, Kozo Yamamoto, believes that Japan must revise a law stipulating the BoJ mandate and responsibilities regarding the event of a CBDC.
In line with a recent official report by Reuters, Yamamoto revealed that potential amendments to the BoJ law would be an honest opportunity to consider other changes like adding job creation to the central bank’s mandate. The official also added that the revised BoJ law should include provisions for inflation rates:
“Like the U.S. Federal Reserve, the BOJ should set job creation and inflation as its mandate […] The new law should also clarify that 2% inflation is the BOJ’s policy target.”
Yamamoto’s remarks come shortly after the BoJ officially revealed its plans to conduct a proof-of-concept for the digital yen later in the year 2021. The announcement came as a part of Japan’s central bank’s first joint report into CBDC issued recently on 9th Oct. Prior to this official announcement, the BoJ was claiming that it had no plans to launch a CBDC within the near future.
Japan is seemingly getting more serious about its own CBDC amid China’s aggressive progress with the digital yuan. Earlier on 9th Oct., the vice-finance minister for Japan’s global affairs warned the international community of the potential risks of China taking the “first-mover advantage” in issuing a CBDC.