TOKYO, Dec 23 Reuters Japanese policymakers must engage more with platform operators and financial institutions to ensure any plan to issue a digital yen does not crowd out the private sector, a lawmaker overseeing the ruling partys deliberations on digital currencies said.
The Bank of Japan plans to begin experimenting next year with issuing its own digital currency, as other central banks step up the pace of their digital currency development.
With an eye on rapid progress China is making towards a digital yuan, Japans ruling Liberal Democratic Party LDP has urged the BOJ to speed up development of a digital yen.
Japan should seek to maximise the potential a central bank digital currency CBDC can offer, Hideki Murai, who oversees the partys project team on digital currencies, told Reuters in an interview on Tuesday.
But CBDC is not the only way to make digital settlements more convenient, he said, stressing that Japan should be open to other means such as enhancing its existing settlements system.
The key is to ensure CBDC doesnt crowd out private businesses, Murai said, adding the project teams focus next year would be to get private companies more involved.
Its important for private companies to understand what CBDC means to them, while policymakers must have a deeper understanding on what the private sector is doing, said Murai, a former finance ministry official who has close contacts with incumbent policymakers.
Unlike in China where a handful of…