former Bank of Japan official suggests not to use CBDCs

Hiromi Yamaoka explained the negative results of the use of Japanese Central Bank Digital Currency (CBDCs).

Besides the adoption of the crypto industry, the majority of the tech companies and financial institutions are considering the use of blockchain technology in their ways of use cases. Right now more than 91 Central banks are doing research and development work on CBDCs, while 11 banks are in the pilot phase. 

On 31 January, Japan Times published a report on the statement of the former head of the Bank of Japan, Hiromi Yamaoka. 

According to the report, Hiromi Yamaoka stated that people should not use Digital Yen because it may result in some negative results. 

The main negative point of the Digital Yen use is negative interest rates. He believes that if Digital Yen will go through huge adoption then it will result in a risk to financial stability because it will burn money slowly and further it will end up into a huge downfall in the value of the Yen. 

Hiromi is currently working as a chairman of a forum of 74 firms which include some of the biggest banks in the country. And also the forum is working on its private Digital Currency. Reportedly Forum planned to launch its Digital Currency in April of this year. 

In 2020, the Bank of Japan released its three-phase plan of Digital Yen launching. In the two phases, Japan aimed to test the Digital Yen and the last phase will be the pilot phase. In April 2021, BOJ officially announced Rollups for the first phase of digital Yen. 

In the present time, the majority of the people are using cash as a king to pay for daily needs services. Due to the choice of offline mode of payment through cash, citizens may not go through the majority of the online modes. The Bank of Japan also noted this and in July 2020 Bank published its research paper on offline transactions with CBDCs. 

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