Japan’s Central Bank Digital Currency Feedback Shows Strong Signs of Positive CBDC Options for Banknotes and Settlements
In March of 2018, the Bank for International Settlements released a report dividing the CBDC’s (central bank digital currencies) into two categories: general purpose CBDCs and wholesale CBDCs.
This is believed to be the catalyst responsible for the latest release by Japan’s Central Bank Feb. 19, a report detailing the present and future role of CBDCs in the current monetary system. The document highlights multiple ways in which CBDCs might be implemented and the hypothetical consequences they could each have.
Like the report from International Settlements, it separates them into almost exactly the same two categories- what the general public will have access to (similar to banknotes) and the limited version for large-value settlements.
The focus of the implications and applications of CBDC within the document was almost entirely on the first type, after explaining how and why the latter will have less of a bearing on the overall monetary system, going on in some detail. It even noted the importance that distributed ledger tech and blockchain in general could have in making a digital token CBDC.
Interestingly enough, Cointelegraph reported October of last year that deputy governor of Japan’s central bank, Masayoshi Amamiya, reiterated a negative stance towards central bank-issued currencies while at a meeting in Nagoya. In April he was quoted during closing remarks of a fintech conference saying:
“To sum up, IT innovation raises many fundamental questions and challenges related to the currency system, the design of central bank infrastructure and the utilization of information attached to economic activities.”
South Korea central bank has issued warning of CBDCs just over a week after saying it has no plans on issuing its own, Jan. 29 and Feb, 7 respectively.
For more information, Japan’s Central Bank report can be read in full here: http://www.boj.or.jp/en/research/wps_rev/wps_2019/wp19e02.htm/