The Liberal Democratic Party of the country was presented last month, a proposal to the government to issue a digital currency. Before this the Bank of Japan does not support the proposal, reasoned that its economy is advanced, which means little advantage, since what is more likely is that the costs exceed the benefits.
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Why this fear of Japan?
The issuance of this digital currency, in its most simple terms, would be the money on the basis of the digital currency established and regulated by the government. Therefore, its primary distinction would lie in that would be issued and backed by central banks. Under this premise we can expect the cryptocurrencies issued by central banks are digital instruments of high security, that they have the three functions of money, medium of payment, unit of account and storage of value. As a result will allow the country’s central bank to become the sole repository of transactions from all over the country. This generates a total control of the personal financial data of the inhabitants. In addition, it should be borne in mind that the country is not prepared to abandon the cash. According to a transcript of the speech given by the deputy governor of the Bank of Japan, Masayoshi Amamiya: “in Addition, the monetary systems and payment and settlement systems of these economies are operating in a safe and stable manner. You can’t just jump to new technologies, or in reality, should not be”. It would lead us to questions such as, for example, how to integrate to the sectors that are less banked to this format? What you say commercial banks that could see shifted its business model? How do the users highly dependent on cash.
Reasons that drive the interest in digital currencies
It is very true, first, that Japan has been moving strongly towards the advancement of the digital currencies and the blockchain in their country and around the world. Second that has been very positive with regard to this new and revolutionary system of electronic transfer of cash between pairs, even in the midst of several negative notions in the market of digital currencies. Because of this, Japan has created several exchanges of cryptocurrencies that operate not only in the demographics of Japan but around the world.