The country’s Liberal Democratic Party presented last month, a proposal to the government to issue a digital currency. Given this, the Bank of Japan says it does not support the proposal, motivated by the fact that its economy is advanced, which means little advantage, given that the costs are more likely to outweigh the benefits.
Why this fear of Japan?
The issuance of this digital currency, in simpler terms, would be the money on a digital basis of a currency established and regulated by the government. Therefore, its main distinction would be that they would be issued and backed by central banks.
Under this premise we can expect that cryptocurrencies issued by central banks are high security digital instruments, which have the three functions of money, means of payment, unit of account and storage of value.
As a result, it will allow the country’s central bank to become the sole depository for transactions across the country.
This generates total control of the personal financial data of the inhabitants. Additionally, it should be taken into account that the country is not prepared to abandon cash.
According to a transcript of the speech given by the deputy governor of the Bank of Japan, Masayoshi Amamiya:
“In addition, the monetary systems and payment and settlement systems of these economies are operating in a safe and stable manner. They can’t just jump to new technologies, or really, they shouldn’t. ”
It would lead us to questions such as, for example, how to integrate the less banked sectors into this format? What will commercial banks say that could see their business model displaced? How do users react highly dependent on cash.
Reasons that drive interest in digital currencies
It is very true, first that Japan has been moving steadily towards the advance of digital and blockchain currencies in their country and around the world.
Second, it has been very positive with regard to this revolutionary new electronic peer transfer system, even in the midst of several negative notions in the digital currency market.
Because of this, Japan has created several cryptocurrency exchanges that operate not only in the demographics of Japan but throughout the world.