The cryptocurrency market would benefit from the presence of the Digital Yen and other central bank digital currencies (CBDCs)
The CEO of Monex Group told Reuters yesterday that he believes that Digital Yen would positively impact the cryptocurrency market. Oki Matsumoto, the head of the financial services firm, stated that the introduction of the Digital Yen by the Bank of Japan (BOJ) is likely to boost the interoperability of cryptocurrencies since it would make it easier to exchange fiat currencies for cryptocurrencies. “It would make the cryptocurrency market more lively”, he added.
Matsumoto added that his firm welcomes the idea of issuing a central bank digital currency as he believes it would help Japan move towards an efficient digital economy. At the moment, converting cryptocurrencies into fiat currencies remains a massive challenge as most small cryptocurrency exchanges don’t have bank accounts, Matsumoto added. If the Digital Yen and other CBDCs are issued, we would have digital-friendly platforms where cryptocurrencies and legal tenders can be exchanged and converted to one another more smoothly.
Monex Group stands to benefit from the creation of a Digital Yuan as the financial services company manages a host of online retail brokerages in Japan and overseas. Monex Group owns Tokyo-based cryptocurrency exchange Coincheck, which it bought after the 2018 hack of the platform, resulting in the loss of $500 million.
The Bank of Japan, similar to other central banks around the world, has been experimenting on how to operate a CBDC. In July, the BOJ set up a dedicated team to look at the implications of a central bank digital currency. The BOJ’s senior economist, Kazushige Kamiyama, was tasked to lead the department in charge of CBDC research and development. Last month, the apex bank revealed that it would start experimenting next year on how to operate its own digital currency.
Japan will be joining a host of other countries that are working on developing their CBDCs. China remains one of the major players in this aspect as the People’s Bank of China (PBC) is already experimenting the implications of its Digital Yuan in partnership with some of the leading companies in the country.
Sweden, the Bahamas and the Marshall Islands are also experimenting with their central bank digital currencies. The EU is also talking about researching the possibility of a CBDC. Hence, it wouldn’t be long before several countries around the world issue their own digital currencies.
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