Bank of Japan fears central bank crypto would force them to abandon cash

Bank of Japan cryptocurrency

Reuters have reported that the deputy governor of the Bank of Japan, Masayoshi Amamiya has announced that the central bank cannot adopt a centralized digital currency, because that would mean the abandonment of cash.

According to Masayoshi, the introduction of a Central Bank Digital Currency (CBDC) would not introduce negative interest rates with the institutions, in fact, it would cause an uptick.

The issue is that holding the CBDC would cause fees, meaning the negative interest rates would simply zero-out or translate into regular rates that the bank currently has.

And the after effects of the digital currency adoption are simply not worth it to switch the economy completely to cryptos.

Amamiya added that getting rid of cash would introduce a whole slew of issues for investors in the form of payment infrastructure.

A completely digitalized economy would make it extremely inconvenient, which would prompt the local population to still go for cash and ultimately revive the black market.

Japan is one of the most crypto friendly countries out there. The adoption is at a level that pretty much everything can be purchased with Bitcoin in the country.

However, the crypto holders are forced to pay a hefty price for such benefits, in the form of 55% crypto tax which has been boycotted by multiple financial organizations.