BOJ's Amamiya calls for more scrutiny in issuing digital
currency
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[February 27, 2020] By
Leika Kihara
TOKYO (Reuters) - Central banks must get a
better understanding of the benefits and risks of issuing their own
digital currencies, and look at ways to mitigate any associated perils,
Bank of Japan Deputy Governor Masayoshi Amamiya said on Thursday.
By issuing their own digital currencies, central banks can act as a
bridge for private sector money flows and streamline settlement, Amamiya
said.
All the same, such a practice could also stifle private-sector financial
innovation and draw money away from deposits at commercial banks if they
succeed in issuing low-cost digital currencies, he said.
"When countries consider issuing central bank digital currencies, they
must conduct a comprehensive study on how it affects their settlement
and financial systems," Amamiya said in a speech in Tokyo on Japan's
settlement system.
Some emerging economies are looking seriously at issuing central bank
digital currencies (CBDC) because of the need to counter money
laundering or to deal with a lack of resilient financial infrastructure.
Japan and many other advanced economies do not face such problems that
require them to immediately issue CBDCs, he said.
"Unlike emerging economies, we cannot and should not jump immediately"
towards issuing CBDCs, Amamiya said.
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Bank of Japan Deputy Governor Masayoshi Amamiya speaks during a
Reuters Newsmaker event in Tokyo, Japan July 5, 2019. REUTERS/Issei
Kato
The current stance among advanced economies is to deal with money
laundering through regulations and oversight - rather than issuing CBDCs,
he said.
Still, the BOJ will set up a team within the bank looking into CBDCs and
work closely with its overseas counterparts on the topic, Amamiya said.
Facebook's <FB.O> push to launch its Libra cryptocurrency has prodded
central banks to fast-track reviews of issuing digital currencies.
The central banks of Britain, the euro zone, Japan, Canada, Sweden and
Switzerland last month announced a plan to share experiences to look at
the case for issuing digital currencies, amid a growing debate over the
future of money.
(Reporting by Leika Kihara; Editing by Tom Hogue & Shri Navaratnam)
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