Kazuo Shibata Assumes Role of Governor of Bank of Japan

According to reports, Kazuo Shibata officially assumes the position of Governor of the Bank of Japan today, and the first policy meeting of the Bank of Japan after taking office will be held from April 27th to 28th. Kazuo Ueda once stated that the decision on the Central Bank’s Digital Currency (CBDC) should be made after a “national discussion”, but he also stated that “as a prerequisite for a system such as the Central Bank’s digital currency, demonstration testing and discussion with relevant parties will continue

Governor of the New Bank of Japan, Kazuo Shibata, takes office today and once said that the CBDC needs to be decided after “national discussions”

On April 9th 2021, Kazuo Shibata took up his new role as Governor of the Bank of Japan (BOJ). As the country reels from the economic effects of the COVID-19 pandemic, Shibata will be responsible for crafting policies to steer the nation towards a path of economic recovery. It’s worth noting that Shibata previously served as BOJ’s executive director in charge of monetary policy and as head of the financial markets department.

What To Expect From Shibata’s Tenure

Shibata has his work cut out for him, as deflation and negative interest rates continue to linger in the country. One key measure he may consider implementing is a Central Bank’s Digital Currency (CBDC), which is currently being explored by several countries around the world.
In fact, Shibata has already stated that he intends to prioritize research on CBDCs during his tenure. He has also said that he plans to boost efforts to digitize payments in Japan to catch up with other countries in the region, such as China and South Korea. Experts believe that this push towards digitalization will also lead to a reduced dependence on cash, which is expected to boost the efficiency of payments and reduce the cost of handling cash.

The Future of CBDCs in Japan

Whether Shibata pushes for the adoption of a CBDC or not, the decision will eventually be made by the government. His predecessor at the BOJ, Haruhiko Kuroda, stated that a CBDC should only be issued after a “national discussion.” However, he also said that “demonstration testing and discussion with relevant parties will continue” as a prerequisite for the implementation of a CBDC system.
Japan has been carrying out tests on the development of a CBDC in collaboration with other central banks in the region, such as the People’s Bank of China. A CBDC would allow the BOJ to have greater control over monetary policy and facilitate financial transactions without the need for intermediaries. This would not only lower transaction costs for consumers but also make it easier for the government to monitor the flow of money in the economy.

Conclusion

Kazuo Shibata has taken up the mantle of Governor of the BOJ at a critical juncture in the country’s economic history. His biggest challenge will be to steer the nation’s economy out of the doldrums caused by the pandemic. His plans to focus on digitization and CBDC research are indicative of his readiness to explore new avenues to achieve the required economic growth.

FAQs

1. What is a Central Bank’s Digital Currency (CBDC)?
A CBDC is a digital currency issued by a country’s central bank that can be used as both a medium of exchange and a store of value.
2. What is the significance of Shibata’s appointment as BOJ Governor?
Shibata’s appointment as BOJ Governor is significant as he has already expressed his intent to prioritize research on CBDCs and digitalization.
3. Will Japan be implementing a CBDC soon?
The decision to implement a CBDC in Japan ultimately rests with the government; however, the BOJ and other central banks in the region are currently carrying out tests on the development of a CBDC.