The deputy governor of Bank of Japan (BOJ), Masayoshi Amamiya has currently reiterated his negative stance toward the central bank issued digital currencies (CBDC), according to the New York Times reports on October 20.
Amamiya also expresses doubts about the use of CBDC and claims that these kinds of digital currencies are unlikely to improve their existing monetary system while speaking on a meeting in Nagoya central Japan on Saturday. In addition to this, he also stated that the BOJ does not plan to issue such digital currencies. The things will not stop here and he further explained a lot about cryptocurrency in the digital market.
Later, he has questioned that theory and also put the claim that charging interest in central banks issues currencies will only work the digital currencies were eliminate from fiat currencies in the financial system. On the other hand, the public will still convert digital currencies into cash in order to avoid the paying interest. In addition to this, some reports say that “In order for central banks to overcome the zero lower bound on nominal interest rates, they would need to get rid of cash from society.”
The article also reports that few financial experts consider a CBDC as a medium or tool for central banks that can control the economy for once the interest rates fall to the zero. According to this theory, a CBDC would enable the central banks to generate the economy by charging more interest on deposits from firms and individuals and it can turn to induce them to spend much more money.
The deputy governor of the BOJ also stressed out that the bank is not planning to create the CBDC which can widely be used by the public for payment purpose and also for settlement. The shift to bank-issued crypto from the existing sovereign investment and it will not represent the stable means of payment, as per his theory. The existing sovereign currencies are also considered as “quite a high hurdle” while it was associated with their investment, explained by Amamiya in a report.
In turn, the Amamiya claimed that cash is still a popular mean of making payment in the country and the elimination if the fiat money in Japan is “not an option for us as a central bank.”
Earlier in this week, a taxation policy committee in Japan held a discussion which aims to facilitate the cryptocurrency tax reporting process along with the participants that call to alleviate the existing complex tax in the filing regime.
On October 16, the messaging giant LINE of Japan also launches the trading of its currently developed LINK (LN) token on its native BITBOX cryptocurrency exchange. In addition to this, in April, Amamiya also provide a similar skeptical statement on the CBDCs and claim that a state-backed crypto can have a negative impact on the existing financial system. However, at that time, Amamiya claimed that the bank was still eyeing emerging fintech such as crypto in the near future.