Bank of Japan Goes Back on State-Issued Cryptocurrency
The Bank of Japan has realized the hazards of state-issued cryptocurrencies. According to its Deputy Governor Masayoshi Amamiya, a national digital coin may endanger the traditional financial system stabilized in developed countries. The Japanese central bank has no intentions to issue its crypto, he said.
Digital currencies distributed by central banks may have a significant bearing on the current fiscal system, the Deputy Governor of Japan’s central bank Masayoshi Amamiya said during a fintech conference. He told attendees, including representatives of the International Monetary Fund (IMF) and the Japanese Financial Services Authority (FSA), that the Bank of Japan had no immediate intentions to mint its own crypto.
Amamiya remarked that central banks were established to overcome “the turmoil caused by multiple payment instruments.” That’s why they were assigned the exclusive role to issue “central bank money,” he explained. In the two-tiered modern financial system, private banks provide payment services to the general public and allocate financial resources to the economy through loans and credits. According to the Bank of Japan’s executive, this structure “reflects the wisdom of human beings in history to achieve both efficiency and stability.”
Masayoshi Amamiya revealed his concerns that the issuance of central bank digital currencies will allow households and businesses direct access to central bank accounts. “This may have a large impact on the two-tiered currency system and private banks’ financial intermediation”, BOJ’s representative warned. Currently, the central bank allows direct access to its accounts only to a limited number of entities such as private banks, he remarked.
Swiss National Bank showed concerns comparable to those shared by BOJ’s Deputy Governor. Private-sector digital currencies are better and less precarious than any version that might be offered by a central bank, according to Andrea Maechler, a member of the SNB’s governing board. “Digital central bank money is not necessary to ensure efficient cashless payments,” she said.
Originally passionate about the notion of a state-backed cryptocurrency, the Central Bank of Russia has deliberately altered its position, too. Plans to launch a so-called “cryptoruble” have been deferred.
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