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Bank of Japan, ECB and other central banks to discuss starting digital currencies

Kyodo, Reuters

Six major central banks, including the Bank of Japan and the European Central Bank, will meet in mid-April to discuss issues around the prospective introduction of central bank digital currencies, sources close to the matter said Thursday.

The governors of the ECB and central banks in the U.K., Canada, Japan, Sweden and Switzerland will discuss conducting joint research into the possible future introduction of digital currencies, and potential challenges such as cross-currency settlement and defense against cyberattacks, the sources said.

The central bankers will meet in Washington on the sidelines of an International Monetary Fund conference, and will likely issue a report on their discussions later in the year, they added.

The six major central banks announced a plan last month to share their findings from a review of the case for issuing digital currencies, amid growing debate over the future of money.

A Bank of Japan executive said central banks must respond flexibly to rapid digitalization to stay relevant as issuers of money.

“In Japan, we don’t have any plans now to issue central bank digital currencies,” BOJ board member Takako Masai told a news conference in Nara on Thursday.

“But we need to make an effort so we’re ready to respond, in case public demand for central bank digital currencies rises dramatically,” she said.

Facebook Inc.’s plan to introduce its Libra cryptocurrency coupled with a move for a digital yuan in China have prompted central banks to accelerate research into digital currencies.

U.S. Federal Reserve board member Lael Brainard said Wednesday that active public-private sector discussions are needed on regulatory issues related to digital currencies and potential threats to the stability of financial systems.

“Given the dollar’s important role, it is essential that we remain on the frontier of research and policy development regarding CBDC (central bank digital currency),” Brainard said in a speech at a symposium in California.

China’s central bank, the People’s Bank of China, said in a statement from its working conference in January that it is progressing “smoothly” with the development of a government-backed digital currency.