The digital currency is not needed for advanced economies like Japan, said Bank of Japan’s (BoJ) Deputy Governor.
Speaking at the recent Future of Payments Forum, Masayoshi Amamiya said the central bank digital currency (CBDC) has little advantage at the moment.
He added that CBDCs could benefit developing countries, such as Cambodia, which have an “immature” payments infrastructure. However, as for developed economies, the costs outweigh the benefits.
Amamiya went up to say:
“At this point, there is no need to implement new steps to ensure people’s access to central bank money. Moreover, the currency systems and the payment and settlement systems of these economies are operating safely and stably. They cannot simply jump into new technologies, or actually, they should not.”
The official indicated that, even if we assume that the CBDCs will operate at lower costs, traders would prefer CBDCs over private payment systems. However, he said this would “stop private businesses and discourage innovations.”
Amamiya also said if Japan releases the digital yen, the central bank may become the only repository of transaction information in the country.
The top official’s statements come after growing speculation that Japan is preparing to release the digital yen. In February, the country’s top politicians at the Liberal Democratic Party submitted a formal proposal to the government to issue its own digital currency in the face of a growing monetary threat from the digital yuan planned from China.
Although the top official does not favor the Japanese CBDC agreement at the moment, he has called for more research on digital currencies.
Major central banks to discuss CBDC in April
The Bank of Japan was also one of six central banks that formed a working group to share results on CBDCs earlier this year.
Governors of six major central banks will meet in April in Washington to discuss digital currencies.
Takako Masai, a board member at Bank of Japan, said no timetable has been fixed for the meeting, but the central banks should respond to the rapid growth of digitalization.