In line with a recent report by ‘New York Times,’ while speaking in a recent meeting held at Nagoya, central Japan, the deputy governor of BOJ [Bank Of Japan] Masayoshi Amamiya expressed doubts regarding the employment of CBDC, claiming that such digital currencies are unlikely to boost the prevailing financial systems. Amamiya added that BOJ is not planning to issue digital currencies.
The article reports that some monetary experts consider CBDC as a tool for central banks to manage the economy once interest rates fall to zero. In line with this theory, a CBDC would alter central banks to stimulate the economy by charging a lot of interest on deposits from people and companies, which might successively induce them to pay more cash.
Amamiya questioned the theory, claiming that charging interest on central banks-issued currencies would solely work if central banks eliminate fiat money from the financial system. Otherwise, the general public would continue changing their digital currencies into the fiat currencies so as to avoid paying interest:
“In order for central banks to beat the zero boundary on nominal interest rates, they’d first need to get rid of cash from the society.”
In turn, the elimination of fiat money in Japan is “not an option for us as a central bank,” since cash remains a preferred method of payment within the country, Amamiya claimed.
The BOJ deputy governor stressed that the bank isn’t designing making a CBDC which will be wide employed by the general public for settlement and payment functions. The shift to bank-issued crypto from the prevailing sovereign currencies is taken into account “quite a high hurdle,” whereas crypto assets are usually related to speculative investments and don’t represent a stable means of payment, he noted.
Earlier in April, Amamiya provided an analogous sceptical statement on CBDCs, claiming that a state-backed crypto might have a negative impact on the prevailing financial system. However, at that time, Amamiya claimed that the bank was still eyeing rising fintech like crypto within the future.
Even earlier this week, a Japanese taxation policy committee held a discussion aiming to facilitate the crypto taxation filing process, with participants calling to alleviate the prevailinEg complicated tax filing regime.
As reported by EtherDesk earlier on Oct. 17, Japan’s instant messaging freeware ‘LINE’ launched trading of its recently-developed LINK [LN] token on its native BITBOX cryptocurrency exchange.