Several regions across the globe have begun considering cryptocurrencies as a potential asset. This pace of adoption was spurred by comments from officials in countries like China and the United States.
Japan is the latest country to enter the cryptocurrency ring with rumors that the creation of the CBDC was underway. This was discussed again by Masayoshi Amamiya, Deputy Governor of the Bank of Japan.
There have been several reports over the last couple of weeks pointing to Japan’s interest in creating a CBDC. While Amamiya’s remarks did not exactly glorify the virtual asset industry, the discussion was still constructive.
The deputy governor stated that central banks need to have a better understanding of the industry before they make any promises.
In his speech, Amamiya said:
“When countries consider issuing central bank digital currencies, they must conduct a comprehensive study on how it affects their settlement and financial systems. Unlike emerging economies, we cannot and should not jump immediately.”
Amamiya added that the industry has several risks and that banks need to be highly cautious when dealing with them. He also mentioned some of the advantages of using blockchain technology as well as creating a CBDC.
Amamiya claimed central banks could serve as a gateway to flows of money from the private sector and streamline settlement processes by owning their own digital currency.
The aforementioned advantage had a flip side to it. It is expected that CBDC transactions would draw money from conventional bank deposits, an idea that did not appeal to the mainstream.
According to Amamiya, the countries that issued their own CBDC did so because of the financial-sphere problems they faced. He reaffirmed that Japan, for the most part, faced no AML problems which required a sudden launch of CBDC.
What made Amamiya’s restrained comments news-worthy was the fact that he had urged the BOJ to be ready to create a CBDC just last month.
He had then said that it was very important for Japan’s central bank to continue examining the possibility of releasing a CBDC. The speed of technological innovation is fast and Japan will watch the progress, he had said.
The deputy governor added that the nation will still be part of a team examining the CBDC world’s pros and cons. The committee will include businesses and representatives from around the globe who will sit together to agree on a global implementation process for the CBDC.
Countries like China have decided to take the plunge in order to focus on removing bad actors from the financial ecosystem. China has yet to set a date for the launch of its token, but sources show that the work behind it is going on in full swing.