The deputy governor of Bank of Japan (BoJ) has stated that the central bank has no plans to issue a digital currency.
Masayoshi Amamiya stated what has been known as his opinion on digital currencies according to reports by New York Times. In the report, Amamiya said that there is no indication that a central bank issued digital policy can improve the monetary policy.
His assertion may be contrary to the drive of many central banks towards cashless economic transactions.
Since discussions about digital currencies started at the banker’s bank level. There have been insinuations that central banks may be considering it as a way of exercising higher control over monetary issues especially when interest rates drop to zero.
The theory stated that when there is need for the economy to be stimulated, the central bank of such countries can charge higher interest rates from individuals and businesses to accomplish this.
According to Amamiya who questioned the theory:
“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.”
He said that unless there is complete elimination of cash, individuals would still convert cryptocurrencies to cash to avoid paying interests. So the answer to such control would be complete elimination of fiat.
He however said that elimination of fiat is not even an option to be considered in Japan because it is still very popular among the populace.
Another reason why the BoJ is not considering issuing a digital currency is that it is quite a “high hurdle”. He said that crypto assets have largely been speculative instrument and have not really made considerable progress at becoming a means of payment. He maintained that they are yet to become stable means of payment.
Amamiya has always made known his anti crypto stance. Earlier in the year he has said that the introduction of state–backed cryptocurrency would have adverse effects on the financial system. He however said that the bank was still studying it and its impact.
The BoJ is not alone in voicing opposition towards digital currencies and its wide usage and application. From India to Zimbabwe, most central banks especially in developing counties have issued warnings on the use and investment in digital currencies.
Some have taken a step further by having them either restricted or completely banned.
Interestingly, most of the developed countries are adopting a more cautious yet liberal approach to the cryptocurrency adoption question.
The Japanese taxation agency has been working on a policy that enhances cryptocurrency tax reporting. This they said will alleviate the current complex filing system. “The environment should be adjusted so that tax returns can be simplified,” a local press agency Sankei reported.