Central Bank Digital Currency May Bring Wider Access

Central Bank Digital Currency May Bring Wider Access

A blockchain-based central bank digital currency issued to the public is expected to allow wider access to payment and settlement systems, as the depu

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A blockchain-based central bank digital currency issued to the public is expected to allow wider access to payment and settlement systems, as the deputy governor of the Bank of Japan, Hiroshi Nakaso, said.

Speaking at an official forum addressing the ‘Future of central bank payment and settlement systems’, the senior official commented on the “effective use: of the central bank`s payments, as cryptocoinnews.com wrote.

“[W]hile virtual currencies like Bitcoin have emerged under the trend of FinTech, some people argue that central banks should consider issuing digital currencies, which could partially replace banknotes.”, he elaborated.

“Such arguments would mean applying digital technology even to banknotes, which have always been based on paper-based technology. This could have a subtstantial impact on the traditional concept of banknotes.”, according to Nakaso.

Central bank digital currencies (CBDCs) have reportedly been explored by a number of central banks around the globe. China, Singapore, the UK, Sweden and others have focused on such exploration. As reported earlier by the media, Bank of Japan staff were “test-driving” blockchain technology following a collaborative research project with the European Central Bank.

The deputy governor of the Bank of Japan also spoke about the different scenarios, in which a central bank digital currency could be issued:

“If CBDC is directly issued to the general public, it would allow wider access to central bank payment and settlement systems both in time and space.”

In more recent quotes, he touched upon the “extreme case” scenario:

“In an extreme case in which CBDC provides the same functionality as banknotes as an alternate measure, it could enable everyone to access central bank accounts 24/7, year-round.”

However, he has also posed important questions to rise a discussion on the subject:

“To what extent should the central bank provide “finality” to economic society? How should the information linked to payment transactions be handled?”

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