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BOJ will not introduce digital yen as vehicle for negative rate


© Reuters. FILE PHOTO: A man wearing a protective mask walks past the Bank of Japan headquarters amid the outbreak of the coronavirus disease (COVID-19) in Tokyo, Japan, May 22, 2020.REUTERS/ Kim Kyung-Hoon

By Leika Kihara

TOKYO (Reuters) – The Bank of Japan (BOJ) will not introduce the digital yen as a means of achieving negative interest rates, an idea sometimes discussed in academia, an official said. central bank seniors said on Wednesday.

In the upcoming trials of central bank digital currency (CBDC) issuance, the BOJ will explore features such as setting limits on the number of transactions and holdings for each entity, Director BOJ executive Shinichi Uchida said in a statement.

The central bank will also consider whether to make the digital yen interest-bearing, although doing so may not be necessary as the CBDC could then become a tight alternative to fiat money. bank, he said.

“While the idea of ​​using such a function as a means of achieving negative interest rates is sometimes discussed in academia, the Bank would not introduce CBDCs in this regard,” Uchida said in a statement. a speech.

The BOJ has yet to decide whether to issue a digital yen but has moved into a second testing phase from April to prepare for a possible future launch.

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