Japan’s central bank, Bank of Japan has put the question of launching cryptocurrencies to rest. A bank official stated on Friday that issuing a central bank cryptocurrency would require the county to end cash totally, which at this stage isn’t feasible.
Deputy Governor of the Bank of Japan, Masayoshi Amamiya negated the idea that by issuing a digital token, it could effectively implement negative interest rate policies. He said,
To overcome the nominal zero lower bound, central banks would need to eliminate cash. Eliminating cash would make settlement infrastructure inconvenient for the public, so no central bank would do this.
After the epic rise of Bitcoin in recent times, the idea of central banks adopting it as the reserve currency, or launching their own tokens has been doing rounds all over. Especially, the rising political tensions of countries like Russia, Iran, and Venezuela, with the United States, has made them consider cryptocurrencies as a potential substitute for the US Dollar.
As has been said for quite some time now, cryptocurrencies are touted to be the future of monetary systems, dethroning fiat currencies. In the near future, though, Bitcoin could well be the medium of exchange for international trade, putting an end to the dominance of the USD.
As of date, no central bank in the world offers crypto directly to the users, though giving limited access to private banks to store digital coins as reserves. However, with the rapidly growing market, and the emergence of Libra, the day when central banks launch their own coin doesn’t seem too far.