Bank of Japan’s (BOJ) former head of financial settlements has changed his mind about creating a central bank digital currency (CBDC).
What happened: According to a Japan Times report, Hiromi Yamaoka thinks that digital assets have the potential to damage the financial system of Japan. He advised everyone against the digital yen after doing extensive research.
"Some say that negative interest rates could work more effectively with a digital currency, but I don’t think so," Yamaoka said.
Many experts believe that a CBDC could open the door for many new opportunities for Japan, which was one of the first crypto regulators, though fiat currency still remains the main form of payment in the country.
The first phase of a Japanese CBDC was initiated in April 2021 and is anticipated to be completed in Q1 of this year. The second and third phases will start later this year, according to the outline shared by the BOJ in 2020.
See Also: What Is a Central Bank Digital Currency (CBDC)?
Japan is not the first country to move forward with a CBDC. China, the Bahamas, Sweden and many more countries have been developing their own CBDCs.
Furthermore, the Reserve Bank of Australia, Central Bank of Malaysia, Monetary Authority of Singapore and South African Reserve Bank have been working with the Bank for International Settlements Innovation Hub on cross-border digital asset settlements in an initiative called Project Dunbar.
