Cryptocurrency

Japan’s Central Bank Says Digital Currency Demand Could Soar

Bank of Japan

Although the Bank of Japan has no immediate time frame to issue digital currencies, the central bank’s deputy governor said it should explore the possibility and be ready, Reuters reported on Thursday (Jan. 30).

Masayoshi Amamiya said that if technology triggers increased public interest, it is possible there could be a need for the issuance of central bank digital currencies (CBDC).

There are still many details that must be investigated before CBDC can be issued, Amamiya said. There are issues on the table, such as its effect on monetary policy and making certain rigorous security standards are implemented.

But he stressed he felt it was “very important” that the BOJ continues to scrutinize the feasibility of circulating CBDC. His stance has been the strongest so far from a central bank official regarding electronic money. 

“The speed of technical innovation is very fast. Depending on how things unfold in the world of settlement systems, public demand for CBDCs could soar in Japan,” Amamiya said in a seminar in Tokyo on Thursday (Jan. 30). “We must be prepared to respond if that happens.” 

Amamiya said he doesn’t foresee CBDC changing how the current monetary policy affects areas like interest rates, asset prices and lending.

“But the transmission mechanism ... could become more complicated and difficult (to break down) if settlement systems change,” he said.

According to several U.S. academics, electronic currencies could make it easier for central banks to enact negative interest rates on deposits. Amamiya said that scenario is “worth looking into.”

The announcement by Facebook about the launch of its Libra cryptocurrency coin has prompted central banks to seriously consider issuing electronic money.

As the future of money is discussed, the central banks of Britain, the eurozone, Japan, Canada, Sweden and Switzerland have recently said they would collaborate as a group on what is entailed for issuing digital currencies.

——————————

NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

TRENDING RIGHT NOW