Central Bank-Issued Cryptocurrencies Are Not Effective According To The Deputy Governor Of The Bank Of Japan

In our latest digital currency news today, the deputy governor of the Bank of Japan noted that central bank-issued digital currencies are not an effective economic tool.

Deputy governor Masayoshi Amamiya confirmed his stance at a meeting in central Japan where he expressed his doubts about using digital currencies by saying that they are unlikely to improve the current monetary system or and that the Bank of Japan has no intention to issue digital currencies at all.

Other financial experts beg to differ. The supporters believe that cryptocurrencies are a great tool for central banks and that with them; banks can control the economy more easily. Also, by using them, the banks will further stimulate the economy by charging more interest on deposits from people and companies that will make them spend even more money.

However, Amamiya doesn’t agree with this theory claiming that by charging more interest the public will continue to convert digital currencies into cash so they will avoid paying it at all. If the central banks eliminate fiat money from the entire financial system, on the other hand, that theory could work.

“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,’’ said Amamiya.

This is not the first time Amamiya expresses his skepticism about digital currencies. He firmly believes that cryptocurrencies will have a negative impact on the current financial system. However, he considers emerging into fintech in the future.