Bank of Japan’s Deputy Governor Claims That Digital Currencies Are Unlikely To Improve Monetary Systems

The Bank of Japan’s (BOJ) deputy governor Masayoshi Amamiya has recently expressed his negative attitude towards central bank-issued digital currencies (CBDC). Speaking on Saturday at a meeting in Nagoya, central Japan, Amamiya expressed doubts about the use of CBDCs, claiming that such currencies are unlikely to improve the existing monetary systems. Amamiya also stated that the BOJ does not plan to issue any virtual currencies.

Few of the financial experts consider a CBDC as a tool for central banks to control the economy once interest rates fall to zero. According to this theory, central bank-issued digital currencies would enable central banks to stimulate the economy by charging more interest on deposits from individuals and firms, which would, in turn, induce them to spend more money. As per Amamiya there was “quite an obstacle” for cryptocurrencies to overcome fiat currencies, and pointed out that they are normally used as a means for asset rather than for actual payment or settlement.

Mario Draghi, the president of the European Central Bank and extensively considered one of the most significant figures in international finance, recently downplayed the idea, stating that the “underlying technology is still delicate”. Regulators all around the world have stated concern about the increasing presence of digital currencies, which are not backed by any central bank because of their unpredictability, as reported by Reuters.

Recently, the head of the Central Bank of the Russian Federation Elvira Nabiullina was vocal about the fact that investor interest in cryptocurrency was fading and that cryptocurrency fever was vanishing. She also approved that initial coin offerings were a real way to raise funds, but was quick to point out the huge percentage of scams in the sector, as well.

AS per CCN, in spite of these statements at central banks, there are other administrations that believe otherwise. The World Trade Organization, which many contemplate being the number one organization in terms of regulating international report, recently released a report that appeared to acclaim digital currencies and assets as well as their potential.

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