Bank of Japan governor calls for digital currency caution
Central banks looking to issue digital currencies need to gain better understanding of the benefits and drawbacks before making any sudden moves, said Masayoshi Amamiya, deputy governor for the Bank of Japan during a speech in Tokyo this week.
The Bank of Japan has previously floated the idea of a digital yen
Amamiya said that central banks can play an important role as a bridge in private sector money flows, according to Reuters’ report on the speech.
However, the deputy governor conceded that doing so could move capital away from commercial banks, and stifle innovation in the private sector.
Amamiya suggested that countries should conduct “a comprehensive study” on how central bank-backed digital currencies (CBDCs) could affect their settlement and financial systems.
As well as the Bank of Japan, several central banks are investigating the potential involved in issuing their own digital currencies, including Sweden’s Riksbank, the central bank of the Bahamas, the Bank of Canada.
In Germany the Association of German Banks (Bankenverband) has called on the European Union to develop its own digital euro.
Amamiya says that unlike emerging markets, central banks at the heart of major economies should not “jump immediately”.
Related: Japan floats idea of digital yen
