Six central banks planning to issue digital currencies

Six central banks are planning to discuss issuing digital currencies (Photo: Bank of Japan)

Central banks in Japan, Europe, and Canada are taking a joint look into issuing digital currencies in their home jurisdictions, hoping to offer a convenient and safe alternative to Facebook's Libra or the digital yuan.

Six central banks and the Bank for International Settlements (BIS) will discuss introducing their own digital currencies in the upcoming meeting in April.

Accordingly, the central banks of the UK, Switzerland, Sweden, Canada, and Japan, as well as the European Central Bank formed a working group with the BIS in January for joint research on central bank digital currencies, Nikkei Asian Review reported.

It is believed that the entrance of digital currencies, such as Libra from Facebook or the digital yuan China is planning, into international settlements will undermine the influence of existing currencies such as the British pound, Japanese yen or European euro.

The draft standards and procedures are expected to be discussed at first, together with how digital currencies are used to make international payments between the banks. Security measures will be another key topic.

As this group researches digital currencies, "It is quite natural to consider how to make international transactions more convenient," said Masazumi Wakatabe, deputy governor of the Bank of Japan, an area that is currently notorious for its high fees.

According to Nikkei, senior representatives of the banks, such as deputy governors and directors, along with working-level officials, will prepare their findings before the leaders meet on the sidelines of an international conference in Washington. The group intends to issue an interim report in June and a final report in the autumn.

The State Bank of Vietnam (SBV) is still not part of this framework since there are no future plans to launch digital currencies in Vietnam

Currently, the State Bank of Vietnam (SBV) is not part of this framework since there are no future plans to launch digital currencies in Vietnam.

Federal Reserve Chairman Jerome Powell said in November the US central bank has not yet followed any digital currency proposals. Doing so would be difficult in the US, with Americans remaining more committed to cash than other nations, he said.