Former Bank of Japan (BOJ) official who was purportedly in charge of digital currency research now advises against using it.
In fact, Hiromi Yamaoka, the former chief of the Bank of Japan’s financial settlement department, cautioned against adopting the digital yen as part of the country’s monetary strategy, according to an article in the Japan Times.
Yamaoka’s main issue is negative interest rates, and he believes that if the digital yen becomes a popular tool for mass payments, the general public will have to bear the brunt of the fiat currency’s depreciation. He went on to say that the digital yen might jeopardise financial stability and have negative consequences for the economy.
Yamaoka currently employed in the private sector, where he chairs a group of 74 companies that includes some of the country’s largest banks. The group is working on creating a private digital currency in April of this year.
The trial’s first two phases will focus on proving the concept
The BOJ released a three-phase trial framework for its central bank digital currency in October 2020. (CBDC). The trial’s first two phases will focus on proving the concept, while the third part will include a pilot. The first phase began in April 2021 and scheduled to be completed by March of the current year. Later this year, the BOJ planned to begin the second phase of the experiments. Which will examine the technical aspects of the digital yen’s issuance.
Despite being one of the first countries to regulate cryptocurrency, cash reigns supreme in Japan’s retail sector due to natural disasters that frequently knock out power. As a result, the country’s payment sector is primarily concerned with completing offline transactions. A research report on building an offline CBDC published by the central bank in July 2020.
In a statement released on Friday, BOJ Governor Haruhiko Kuroda stated that no imminent launch planned. He also mentioned that a digital yen might be available by 2026. And that the central bank will not be the sole decision-maker.