Central bank digital currencies (CBDCs) continue to gather steam.
Masayoshi Amamiya, the deputy governor of the Bank of Japan (BOJ), told a seminar in Tokyo on Thursday that the BOJ must be ready to issue digital currencies if technical innovation sparks greater demand.
“The speed of technical innovation is very fast,” Reuters quotes the deputy governor. “Depending on how things unfold in the world of settlement systems, public demand for CBDCs could soar in Japan.”
Granted, the BOJ has no immediate plans to issue a CBDC, he said, but it was still important to examine the possibility of issuing one.
Japan is notorious for its adherence to cash in the face of global trends toward mobile payments. That hasn’t stopped the BOJ from taking a hard look at digital currencies. Japan’s central bank recently teamed up with the Bank for International Settlements and the central banks of Canada, England, the EU, Sweden and Switzerland to look at potential use cases for CBDCs.
BOJ governor Haruhiko Kuroda has also said his bank was conducting technical and legal research into CBDCs. And the country’s ruling Liberal Democratic Party is also working on a proposal to issue a CBDC, citing a need to respond to China’s moves in that direction.
If this is all sounding rather familiar to readers in Korea, that’s because it should.
Digital currencies offer central banks significant improvements in speed and efficiency.
“The main motivations for pursuing a wholesale CBDC, according to survey respondents, lie in the potential to improve speed and cost efficiency,” writes IBM’s blockchain blog. “It may also help to overcome the limitations of existing systems, especially in system security and resilience. A wholesale CBDC can reduce operational risks and running costs due to productivity gains as more financial assets become tokenized and recorded on distributed ledgers.”
Of course, there are reasons why privacy activists and civil libertarians might view CBDCs with alarm, but we digress…
U.S. lawmakers are suggesting a “digital dollar” is in the making. Rep. French Hill (R-Ar), a member of the House Fintech Task Force, told CoinTelegraph after a hearing on Thursday, “A payments system that has a regulatory rail that’s blockchain, that’s open to banking companies and non-banking companies to offer a payment alternative, is where we’re headed.”
Meanwhile, in Davos, the World Economic Forum announced a new framework, the so-called CBDC Policy-Maker Toolkit, to help central banks create digital currencies. The same body has also created a global consortium for digital currency governance that will focus on “the development of interoperable, transparent and inclusive policy approaches to regulating the digital currency space and fostering public-private collaboration in both developed and emerging economies.”
Central banks, Facebook and exclusive gathering of the world’s economic elite in Swiss ski resorts — I’m not sure it’s what the cypherpunks had in mind, but it seems to be where we’re heading.