Japan Central Bank Examines Digital Currencies Again

Japan Central Bank Examines Digital Currencies Again

The role of central bank digital currencies (CBDCs) in the present monetary system is being re-examined by the Bank of Japan (BoJ). The central bank summarized the findings in a comprehensive report published after previous negative opinion of CBDCs by the bank last year.

In the said report, BoJ mentioned various approaches to implement a CBDC. Moreover, probable outcomes of each approach have been discussed in detail. The bank has divided possible CBDCs into two categories. One will be accessible to the general public like banknotes, while the other will be limited to large-value settlements only.

The said categorization has been done in accordance with the report that was published in March 2018 by the Bank for International Settlements, which divided CBDCs into wholesale and general purpose ones.

The report’s authors noted that wholesale CBDCs are not expected to bring any new feature to the existing monetary system. Therefore, the focus must be shifted to the general purpose currencies. The major portion of the report deals with general purpose CBDCs. For token-based ones, blockchain and distributed ledger technology can be utilized, stated the report.

Masayoshi Amamiya, deputy governor of BoJ, holds a negative opinion regarding central bank-issued cryptocurrencies. The South Korean central bank also stated that it will not issue any central bank digital currency.

 

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