Japan, an island country located in East Asia having a vast economy across the world, hardly needs a digital currency according to the deputy governor of Bank of Japan (BoJ), the central bank of Japan was founded after the Meiji Restoration. Masayoshi Amamiya, deputy governor of BoJ, argued a Japanese central bank digital currency (CBDC) presently has little merit. According to him, developing countries with immature payment infrastructure need such CBDCs and Japan being economically strong country doesn’t require CBDC for money transferring.
They don’t want to embrace new technology because the governor thinks the currency systems and the payment and settlement systems of these economies are operating safely and stably. Amamiya talked about some more disadvantages saying CBDCs would suppress private business and discourage innovations. He continued merchants would likely prefer CBDCs over private payment systems thinking CBDCs would operate at lower running costs compared to private initiatives. BoJ, the bank was adapted from a Belgian banking model and headquartered in Nihonbashi, Tokyo, is expected to store and protect personal financial data and would be a sole repository for the whole country’s transaction information if a digital yen is introduced.
Whether Monetary Threat a issue to embrace CBDC
Thinking about the monetary threat around the globe, senior politicians of Japan filed a formal proposal for the government to issue its own digital currency in February and from there a whisper was born among people that Japan was preparing to issue a digital yen. But, Japan is not on this way is evident according to the remarks of Amamiya. The governor thought that issue of CBDC would be successful only when the people of the entire country were prepared to abandon cash. Amamiya paid a comment recently that there were benefits for countries already experiencing a significant decline in the use of cash to move over to a CBDC model indeed.
However, the man suggested running more and more research on CBDC even being disinterested in it. But BoJ is working on that issue actively to discover some other benefits and pinpoints that will lead the country to embrace this technology as other central banks are doing.