Japan has no plans to issue digital currency
Bank of Japan has no plans to issue a central bank digital currency (CBDC), deputy governor Masayoshi Amamiya said at an IMF conference. He said this is on account of financial stability concerns and elaborated issuing a digital currency directly for consumers - whether or not on a blockchain - could undermine the existing two-tiered system. He explained that central banks only give access to limited entities such as private banks, which face consumers directly in a second tier - a process he described as ‘the wisdom of human beings in history to achieve both efficiency and stability in the currency system’. As such, having a digital currency backed by the central bank will change the system without proving to be financially stable, he added. In this regard, the issuance of central bank digital currencies for general use could be analogous to allowing households and firms to directly have accounts in the central bank. This may have a large impact on the aforementioned two-tiered currency system and private banks’ financial intermediation, he added.