Advanced Economies Don’t Need a Digital Currency, Says Bank of Japan Deputy Governor
The deputy governor of the Bank of Japan (BoJ) Masayoshi Amamiya, has argued that advanced economies such as Japan do not need a central bank digital currency (CBDC). He made this claim whiles speaking at the recent Future of Payments Forum organized by the Bank for International Settlement.
In his statement, Amamiya asserted that CBDCs could greatly benefit developing countries that have immature payment infrastructures. He however claims that, as for advanced economies, the disadvantages outweigh the advantages.
The deputy governor stated that, looking at the current financial system, there is no need to implement new steps to ensure people have access to central bank money. He claims the currency systems and the payment and settlement systems of giant economies are operating safely and stably. He doesn’t encourage such economies to simply jump into new technologies.
According to Amamiya, assuming CBDCs would operate at lower costs compared to private initiatives, merchants would likely prefer the CBDCs. However, he claims this would suppress private business and also discourage innovations.
Amamiya added that, should Japan introduce a digital yen, the BoJ could become the sole repository for the entire transaction information of the country. This has raised concerns about how the central bank would store and protect consumer’s financial data.
Featured image courtesy of Shutterstock. Source: Cryptopress.