BOJ may set cap on issuance, holdings if it issues digital yen - official

TOKYO, Oct 15 (Reuters) - The Bank of Japan may set a limit on the amount of central bank digital currencies (CBDC) it issues or allows entities to hold if it is to issue them, a senior BOJ official said on Thursday.

Any such move would be aimed at preventing an unwelcome shift of money out of commercial banks’ accounts into CBDCs, said Kazushige Kamiyama, head of the BOJ’s payment and settlement systems department that oversees CBDC studies.

“It’s an option. But it’s not something we can say will definitely happen,” as much will depend on the outcome of upcoming experiments on CBDCs, he told Reuters.

The BOJ said last week it would begin experimenting from next fiscal year on whether it can issue its own digital currency, joining efforts by other central banks to catch up to rapid private-sector innovation.

Kamiyama said he hopes to begin the first phase of experiments at the start of the next fiscal year in April and move to the second phase by the end of the business year in March 2022.

The final batch of experiments will involve private entities and consumers, though the BOJ had no timetable yet on when it will actually begin issuing CBDCs, he said. (Reporting by Leika Kihara and Takahiko Wada; Editing by Jacqueline Wong)