Bank of Japan: Crypto may compete with Yen in digital shift
BoJ Warns Yen Could Lose Trust if Inflation Isn’t Controlled
A Bank of Japan (BoJ) official has acknowledged that digital assets may reshape the country's payment landscape and potentially compete with the Japanese yen.
Government data revealed that in 2024, cashless payments nearly tripled, reaching 42.8% of all transactions—surpassing the national target of 40% a year ahead of schedule.
Kazushige Kamiyama, Executive Director of the BoJ's digital currency department, stated that while Japan still sees a high circulation of banknotes, “the use of cash could decline significantly in the future amid rapid digitalization.” Although the BoJ has not yet decided whether to officially launch a digital yen, a pilot program launched in 2023 is currently in full swing.
According to Bitbank Ventures, as of December 2024, Japan had over seven million active crypto accounts, up from five million at the beginning of the year. Ethereum remains the most used crypto, but yen- and dollar-pegged stablecoins are also gaining traction, particularly in cross-border payments and remittances.
Rising adoption and inflation concerns
Over the weekend, BoJ Deputy Governor Shinichi Uchida warned that if the central bank fails in its primary mission of price stability, public trust in the yen could erode. In that case, he suggested, another instrument—possibly crypto—could step in.
In a digitally advanced society, Uchida remarked, “there’s no guarantee that a currency issued by a sovereign central bank will continue to serve as a universally accepted means of payment.” While he didn’t name specific assets, his reference to crypto and stablecoins highlights growing awareness among Japan’s financial leaders of their disruptive potential.
Uchida added that he doesn’t expect cash to disappear anytime soon, but the fact that he addressed the potential rise of crypto underscores the evolving future of finance in Japan.
