Bank of Japan Deputy Governor Says Cryptocurrency Positive Effects are Still Unclear
It seems that some important authorities in Japan are lowering expectations about the positive effects related to virtual currencies. Masayoshi Amamiya, Bank of Japan’s Deputy Governor, said that it is unclear whether virtual currencies would be able to enhance monetary policy planned by central banks. At the same time, he mentioned that the bank has no plan to create a national virtual currency.
Cryptocurrencies have been growing and expanding all over the world during the last years. However, Amamiya said that most investors are using them not as a means of payment, but instead as an investment tool.
It is also important to mention that there are some virtual currencies such as XRP that are trying to change that. Ripple is working with many different central banks and financial institutions that want to reduce costs and increase efficiency when dealing with virtual cross-border payments.
There are several central banks around the world that are analyzing the possibility of issuing virtual currencies or central bank digital currencies (CBDC). For example, Norway, Sweden, the United Kingdom, Canada and Iran have all been investigating the effects of issuing a local virtual currency.
In general, some central bankers downplayed virtual currencies and their positive features. Mario Draghi, president of the European Central Bank said that the technology behind virtual currencies is still fragile to be implemented.
Moreover, the head of the Central Bank of the Russian Federation, Elvira Nabiullina, said that crypto fever was already disappearing. This might be related to the fact that during the current year, cryptocurrencies experienced an important bear trend. Back in December 2017, Bitcoin reached $20,000 dollars and now it is being traded close to $6,500 dollars.
However, other institutions such as the International Monetary Fund (IMF) commented very positively about virtual currencies. IMF managing director, Christine Lagarde, said that cryptocurrencies could transform the way in which people save and invest funds.
On the matter, she commented during the 2018 Spring Meeting of the IMF and the World Bank Group:
“That is why policymakers should keep an open mind and work toward an even-handed regulatory framework that minimizes risks while allowing this creative process to bear fruit.”
Moreover, she warned banks and financial institutions that they would have to adapt current business models. FinTech companies are growing and are effectively competing with financial institutions by offering better services.