The Bank Of Japan governor has expressed today his ideas about the impossibility of using cryptocurrencies in applying new and effective financial and economic policies throughout Japan. The deputy governor Masayoshi Amamiya has declared that ideas and theoretical constructions are different things, and when it comes to money, people will always escape to the cheaper solution even if it not the most popular one.
Bank of Japan Worries
Japan was one of the most active countries when we talk about cryptocurrency adoption and regulation. In fact, Japan was one of the first countries that regulated cryptocurrencies and made them legal tender. That is why the opinion of the Bank Of Japan is so important, because, in a way, they were pioneers.
The use of cryptocurrencies in the proposal of an efficient cryptocurrency has been theorized by some, but in the practice, it has never been applied and the Bank of Japan is really skeptical about it.
Sure, cryptocurrencies can be used to change the landscape of payments by decentralizing and bypassing current bank institutions; but use them as a tool of economic restoration seems a bit over the top even for crypto proponents and enthusiasts.
In theory, some economists and cryptocurrency proponents have enunciated that cryptocurrencies could be used to stabilize monetary politics in countries that need spending to stimulate economic growth.
This growth would be stimulated by central banks charging interest to commercial banks for holding their cryptocurrency in a way of charging them for cold storage of sorts. This would effectively cause a very interesting change in the policy of banks, that would rather propose spending instead of saving.
But the deputy governor of the Bank of Japan, Masayoshi Amamiya, affirmed in a statement in the Bank of Japan website, that all of this is like wishful thinking.
Asamiya declared that for this wild idea to be successful, the Bank of Japan would have to progressively substitute cash for cryptocurrencies, with the final objective of turning Japan into a cashless society. But Japan is still a country that relies heavily upon cash, and for them, this task would be impossible
“Getting rid of cash now is not an option for us as a central bank,” he declared bluntly in his statement. Asamiya also remarked the fact that this would be a bad choice for them, because “crypto-assets are rarely used for day-to-day payment and settlement, and are mostly a target for speculative investment”.
So implementing this politic with a mixed crypto/cash system would only cause people to flock to cash to avoid paying interest.