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 digital yen would have a positive impact on the cryptocurrency market. Oki Matsumoto, the head of the financial services company, stated that the Bank of Japan (BOJ) adoption of the digital yen would likely improve cryptocurrency interoperability as it would make it easier to exchange fiat currencies for cryptocurrencies. “It would make the cryptocurrency market more vibrant,” he added.
Matsumoto added that his company welcomes the idea of issuing a digital currency from the central bank, as he believes it would help Japan move towards an efficient digital economy. Right now, converting cryptocurrencies to fiat currencies remains a major challenge as most small cryptocurrency exchanges do not have bank accounts, Matsumoto added. If the digital yen and other CBDCs are issued, we would have digital-friendly platforms where cryptocurrencies and legal tender can be exchanged and converted into one another more smoothly.
Monex Group will benefit from the creation of a digital yuan as the financial services company manages a wide variety of online retail brokers in Japan and overseas. Monex Group owns the Tokyo-based cryptocurrency exchange Coincheck, which it bought after hacking the platform in 2018, resulting in a loss of $ 500 million.
The Bank of Japan, similar to other central banks around the world, has experimented on how to operate a CBDC. In July, the BOJ set up a dedicated team to study the impact of a central bank digital currency. The BOJ’s chief economist, Kazushige Kamiyama, has been appointed to head the CBDC research and development department. Last month, Apex Bank announced that it would experiment with running its own digital currency over the next year.
Japan will join a number of other countries working on developing their CBDCs. China remains a major player in this area as the People’s Bank of China (PBC) is already testing the impact of its digital yuan in partnership with some of the country’s leading companies.
Sweden, the Bahamas and the Marshall Islands are also experimenting with their central bank digital currencies. The EU is also talking about research into the possibility of a CBDC. Hence, it wouldn’t take long for several countries around the world to issue their own digital currencies.