New statements were made by the former official of the Bank of Japan (BoJ) regarding the digital central bank money (digital yen) project in the country. In the statements, it was stated that what kind of consequences the realization of a possible digital money project will have, and it was stated that years should pass before such a project can be started in Japan.
Speaking to Reuters news agency, Hiromi Yamaoka, former director of the Bank of Japan, made various statements about the digital yen project in the country. Yamaoka stated that it is too early for a possible digital currency project to be implemented in Japan. According to Yamaoka, who stated that the country’s economy will be affected if the central bank-backed digital currencies are introduced to the market, the project may take years to complete.
“Central bank and private banks should act together”
According to Yamaoka, there are still various obstacles to the project. One of them will be large-scale outflows from private bank deposits. Determining the problem in this way, Yamaoka explained that in order to prevent this problem, it will be necessary to limit the amount of digital money a single private bank can hold.
Although this solution will be sufficient for a problem, Yamaoka underlined that this situation may lead to different problems. Stating that the limits set in the continuation of his statements will increase the value of digital money, Yamaoka said that in this case, there may be fluctuations in other currency types such as cash and private deposits. Yamaoka also noted that it is the healthiest way for the central bank and private banks to work together within the project.
Digital central bank money projects are a project that countries have been working on as governments, especially recently. A step was taken from Japan towards this project and it was announced that feasibility studies will be started in 2021. However, Yamaoka, a former central bank official, said that despite this, the project could take years to complete.