Using digital currencies will eliminate cash, reveals the Bank of Japan official

Recently a Bank of Japan official ruled out the possibility of using digital currencies issued by banks: this could lead to the permanent abandonment of physical money in the country of the Rising Sun. Here are all the details on the need for a regulatory framework that regulates mechanisms cryptocurrencies.

Using digital currencies will eliminate cash, Bank of Japan official reveals - Masayoshi Amamiya cryptocurrency

Digital currencies, cash and regulation: the bank of Japan's view

Masayoshi Amamiya, the Vice Governor of the Japanese Central Bank, recently shared his opinion on the banks that adopt digital currencies.

Apparently, according to the Vice Governor himself, lenders could make negative interest rate policies effective by issuing their own digital currencies.

Amamiya explains that if there Bank of Japan issues a digital yen and sets a negative interest rate, people and businesses would be burdened by the "weight" of holding the digital currency issued by the bank.

The giants of Social platforms like Facebook, which will launch its new one Libra global cryptocurrency, they must comply with the regulations on money laundering and risk management, stressed the deputy governor of the Bank of Japan Masayoshi Amamiya.

They must act responsibly and comply with the various regulations to become a secure payment solution provider, Amamiya revealed at the event Reuters Newsmaker.

Even if to date there is no reliable information on Facebook's cryptocurrency, central banks must monitor the impact that these moves could have on banking systems.

Cryptocurrencies: the need for a regulatory framework

So far, global central banks have largely abstained from the digital currency regulation, having failed last year to reach a final agreement.

Cryptocurrencies remain one of the least regulated areas of finance and the response of monetary authorities to the Libra project will have a crucial impact on its prospects.

Rapid changes in financial innovation have led some central banks to consider issuing digital currencies, or at least to study the feasibility of doing so in the future.

Amamiya said that the BOJ does not intend to issue digital currencies to date.

"If central bank digital currencies replace private deposits, this could erode the credit channels of commercial banks and have a negative impact on the economy," said Amamiya.

JPMorgan Chase: the perfect example of a bank's crypto

Recently the CEO of Goldman Sachs, David Solomon, revealed that the company is studying the development of its cryptocurrency, such as JPMorgan Chase. In addition, the company is seeking tokenization and Stablecoins of resources as such.

It seems that JPM Chase is the perfect example of what digital currencies issued by banks can do and how lenders and, above all, savers can benefit from this new technology.