Kuroda says BOJ needs to be ready to issue digital yen

By Leika Kihara

TOKYO (Reuters) - The Bank of Japan must be ready to issue central bank digital currencies (CBDC) that coexist with various other forms of money to offer the public a safe digital payment system, its governor Haruhiko Kuroda said on Tuesday.

The central bank will start a pilot programme in April to test the use of a digital yen, joining a growing number of countries seeking to catch up with front-runner China in launching a CBDC.

"Ensuring the coexistence of CBDC with various other forms of money ... is something that we need to and will in fact achieve in the future," Kuroda said in a speech delivered to a seminar on financial technology.

"There are various options lying before us in terms of how and when to carry this out. But it's our duty as a central bank to prepare ourselves to respond flexibly to any change in circumstances," he said.

The BOJ has said the pilot programme, which will follow two years of experiments it had been conducting, will help it be ready in case the government decides to issue a digital yen.

(Reporting by Leika Kihara; Editing by Muralikumar Anantharaman and Sam Holmes)