BOJ Rules out Digital Fiat, But Cambodia Could Issue a CBDC Next Year

The governor of the Bank of Japan (BOJ) Haruhiko Kuroda has ruled out the possibility of launching a digital yen in the short term, but says the bank will continue to look into digital currency technology should the bank change its stance at a later date.

Per media outlet CoinPost, Kuroda also issued a warning about stablecoins (which are currently legal in Japan). The governor stated that stablecoins should only be issued if operators have an organizational structure in place to provide adequate risk management.

Kuroda, who has previously spoken about his “interest” in projects such as Facebook’s Libra, stated that regulators should “carefully consider” companies with large customer bases issuing international stablecoins. Kuroda said that global stablecoins could have a significant impact on monetary policy and the stability of the financial system.

But elsewhere in Asia, Japanese media outlets are also reporting that the National Bank of Cambodia (NBC) believes it will be ready to launch a digital currency and blockchain-powered payments system in 2020 – with the aid of a Japanese technology provider.

The NBC has been working with Japanese blockchain firm Soramitsu since 2017 on a wide range of blockchain projects, and the two parties could be ready to release the Bakong token at some point next year.

Earlier this month, the NBC’s director-general Serey Chea told Asahi Shimbum that although only some 20%-30% of Cambodians have bank accounts, the vast majority have smartphones and other mobile devices – a fact that the NBC simply must do something about.

Chea said,

“Cambodia is a latecomer [when it comes to technology], but that is why it is possible for this country to adopt a platform that uses the latest technology. Using blockchain technology, with NBC as the main administrator, it will be possible to connect the whole country with a nationwide electronic payment system. When citizens create a bank-issued e-wallet using the platform, they will also automatically be issued with a bank account.”

Chea stated that “most Cambodian banks” have agreed to collaborate on the Bakong project. However, she also urged caution, dismissing reports that circulated several months ago about a government-issued cryptocurrency named Enterpay.