Recently, the deputy governor of the Bank of Japan, Masayoshi Amamiya, reiterated his negative stance towards central bank-issued digital currencies (CBDC).
During his speech in Nagoya, Amamiya expressed doubts about CBDC and added that such a digital currency will not be able to improve the existing monetary system. He also said that the Bank of Japan does not plan to issue digital currencies.
Some financial experts consider CBDC as a tool for Central banks, which allows control of the economy after the fall in interest rates. With the help of CBDC, Central banks can stimulate the economy by levying a larger percentage of the deposits of individuals and companies that in the end will force them to increase their own spending.
Amamiya said that this theory is highly questionable, because charging interest on CBDC is only possible if Central banks will eliminate fiat money from the financial system. Otherwise people will continue to resort to convert digital currency into cash to avoid paying interest.
"To overcome the zero lower bound on nominal interest rates, Central banks should refuse to cash. The Bank of Japan can't do it because cash still remains the most popular method of payment for goods and services in the country."
Deputy governor of the Bank of Japan also added that they do not plan to create CBDC, which can be used by the public for payment, because cryptocurrencies often associated with speculative investment and cannot be considered a stable method of payment.