BOJ appoints new head for department overseeing digital currencies

FILE PHOTO: A view of signage outside the headquarters of Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, May 22, 2020.REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) - The Bank of Japan on Friday appointed its top economist as head of a department overseeing research on central bank digital currencies (CBDCs), as it steps up efforts to keep pace with a global drive towards embracing financial innovation.

Kazushige Kamiyama will head the BOJ’s payments and settlement department, which has conducted joint research with other central banks on CBDCs and looked into how the growing presence of crypto-currencies could affect central banking.

The appointment comes at a time the BOJ is shifting away from its caution over the idea of issuing its own digital currency in the future.

It has recently set up a task force focusing on CBDC research and is seeking private-sector expertise to better understand the evolution of digital currencies.

As the BOJ’s top economist, Kamiyama spearheaded efforts to use more big data in analysing the economy - an approach that helped the central bank catch real-time changes affecting the economy amid the coronavirus pandemic.

Seisaku Kameda will succeed Kamiyama as the central bank’s top economist and head of its statistics department, the BOJ said in a statement.

Japan has been cautious about moving too quickly on digital currencies given the social disruptions it may cause in a country that has the most cash-loving population in the world.

But China’s steady progress toward issuing CBDCs has prompted the government to more closely look into the idea of issuing CBDCs.

While the BOJ has said it has no immediate plans to issue its own digital currency, it has been conducting research with other central banks on the issue.

Reporting by Leika Kihara; Editing by Chang-Ran Kim & Shri Navaratnam