The pandemic that has wreaked havoc on countries globally has forced most financial institutions to think of ways to cushion the challenges that may arise in the future.
According to a Reuters report today, one of Japan’s top financial regulators, Ryozo Himino, has advised the country to develop a Central Bank-backed Digital Currency (CBDC), as the coronavirus (COVID-19) pandemic could propel nations around the world into adopting a digital cash economy.
Himino stated that Japan should not be worried about the challenges that may arise without first thinking about developing a CBDC plan. The pandemic may prompt the world to adopt a cashless payment system, he said.
He continued that Japan should first consider the pros and cons of issuing a government-backed cryptocurrency and ensure that all the requirements are available to start developing one when the time comes.
“In the end, Japan must think really hard about whether to issue CBDCs because there are merits and demerits to doing so,” he said.
Coinfomania reported last year that Japan has already started researching digital currency. As reported, a group of researchers from the apex bank released a paper on the benefits and pitfalls of issuing a CBDC given the nation’s current monetary system.
Ryozo Himino has headed notable positions in different financial organizations globally, including Japan’s Financial Service Agency (JFSA) and the Basel Committee on Banking Supervision.
He was the secretary-general of the Basel Committee on Banking Supervision, where he was instrumental in the development of the Basel II framework. Currently, Himino is the JFSA Commissioner after replacing Toshihide Endo in July.
Not promoting cryptocurrencies
Himino disclosed that the nation’s stand on deregulating cryptocurrencies such as Bitcoin (BTC), Ether (ETH), etc., may have an adverse effect on technical innovation.
“Deregulating Bitcoins and other cryptocurrencies may not necessarily promote technical innovation. If doing so simply increases speculative trading, we are not taking special steps to promote cryptocurrencies,” Himino said.
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