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Bank of Japan Doubts Cryptocurrency Will Enhance Monetary Policy

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  • Bank of Japan Doubts Cryptocurrency Will Enhance Monetary Policy

The Deputy Governor, Bank of Japan, Masayoshi Amamiya on Saturday said it is unclear whether digital currencies, Cryptocurrencies, could effectively enhance monetary policy.

While experts have argued that central banks could overcome the “zero lower bound” – a condition where they lose means to stimulate the economy once interest rates fall to zero – by issuing digital currencies to directly debit depositors, the Bank of Japan doubted that possibility.

Some academics also argued that digital currencies would allow central banks to charge interest on deposits of households and firms easily, therefore forcing them to spend rather than hoarding funds during tough economic periods.

However, Amamiya countered the idea, saying issuing digital currencies in order to charge interest on deposits would only work if central banks eliminate cash from society. Otherwise, the public will just convert digital currencies into cash to avoid paying interest.

“Getting rid of cash now is not an option for us as a central bank,” as cash is still widely used in Japan, Amamiya said, according to a text of the speech posted on the BOJ’s website.

Amamiya further said there was “quite a high hurdle” for crypto-assets to overcome sovereign currencies – or currencies issued and backed by central banks – as the main means for payment and settlement.

“This is backed up by the fact that crypto-assets are rarely used for day-to-day payment and settlement, and are mostly a target for speculative investment,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Bitcoin

Jesse Powell Says Bitcoin Could Hit $1 Million Per Coin

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Kraken CEO Sees $1 Million Bitcoin in the Next Decade

The Chief Executive Officer and co-founder of Kraken Exchange, Jesse Powell, has made a bold Bitcoin prediction in a recent interview with Bloomberg.

Powell said Bitcoin could hit $1 million in the next decade, adding that supporters of the crypto asset are already saying it could replace all major fiat currencies.

He went on to predict a disruptive future that would stretch even the imagination of the most ardent crypto fans.

We can only speculate, but when you measure it in terms of dollars, you have to think it’s going to infinity,” he said. “The true believers will tell you that it’s going all the way to the moon, to Mars and eventually, will be the world’s currency.”

He added that his San Francisco-based Kraken is looking to go public next year.

The CEO explained that Bitcoin bulls see surpassing the combined market value of the dollar, euro and other currencies.

The dollar “is only 50 years old and it’s already showing extreme signs of weakness, and I think people will start measuring the price of things in terms of Bitcoin,” he said.

Bitcoin declined by 4.31 percent to $48,329.97 per coin amid rising yields and growing economic recovery.

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Bitcoin

MicroStrategy Dumps Over $1 Billion on Bitcoin, Now Holds $4.78 Billion BTC

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Bitcoin

MicroStrategy Dumps Over $1 Billion on Bitcoin, Now Holds $4.78 Billion BTC

MicroStrategy, a business intelligence firm, announced it has purchased another 19,452 Bitcoin worth $1.026 billion.

The company joined Square and other companies that bought the dip witnessed earlier this week after Elon Musk, Bill Gates and Janet Yellen commented on the fast-rising digital currency.

MicroStrategy now holds 90,531 Bitcoin worth $4.78 billion, more than Elon Musk’s Tesla acquisition of $1.5 billion.

Michael Saylor, the Chief Executive Officer (CEO), MicroStrategy continues to pursue a coin acquisition strategy now codified in the business intelligence company’s mission.

Square purchased 3,318 Bitcoin at an estimated $170 million value on Tuesday when the world’s most dominant cryptocurrency dipped to $45,000 before rebounding to the current level.

Bitcoin presently trading at $49.233.71 per coin as of the time of writing.

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Cryptocurrency

CBN, SEC Anchor Cryptocurrency Ban on Financial System Protection

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CBN, SEC Anchor Cryptocurrency Ban on Financial System Protection

The Central Bank Governor, Mr Godwin Emefiele, on Tuesday said the bank’s decision to prohibit deposit money banks, non-banking institutions and other financial institutions from facilitating trading and dealings in cryptocurrency was in the best interest of Nigerian depositors and the country’s financial system.

Emefiele said this while briefing a joint Senate Committee on Banking, Insurance and Other Financial Institutions; ICT and Cybercrime; and Capital Market, on its directive to institutions under its regulation.

These were according to a statement from CBN titled ‘Cryptocurrency: We acted in Nigerians’ best interest – Emefiele’.

Describing the operations of cryptocurrencies as dangerous and opaque, the CBN governor said the use of cryptocurrency contravened an existing law.

He said the fact that cryptocurrencies were issued by unregulated and unlicensed entities made it contrary to the mandate of the bank, as enshrined in the CBN Act (2007) declaring the bank as the issuer of legal tender in Nigeria.

Emefiele, who also differentiated between digital currencies, which central banks could issue and cryptocurrencies issued by unknown and unregulated entities, stressed that the anonymity, obscurity and concealment of cryptocurrencies made it suitable for those who indulge in illegal activities such as money laundering, terrorism financing, purchase of small arms and light weapons and tax evasion.

Citing instances of investigated criminal activities that had been linked to cryptocurrencies, he stated that the legitimacy of money and the safety of Nigeria’s financial system was central to the mandate of the CBN.

He declared that cryptocurrency was not legitimate money because it was not created or backed by any central bank.

“Cryptocurrency has no place in our monetary system at this time and cryptocurrency transactions should not be carried out through the Nigerian banking system,” he said.

Also speaking, the Director-General, the Securities and Exchange Commission, Mr Lamido Yuguda, clarified that there was no policy contradiction between the CBN directive and the pronouncements made by the SEC on the subject of cryptocurrencies in Nigeria.

He explained that the SEC made its pronouncement at the time to provide regulatory certainty within the digital asset space due to the growing volume of reported flaws.

Prior to the CBN directive, he said, the SEC had in 2017 cautioned the public on the risks involved in investing in digital and cryptocurrency.

He said that the CBN, the Nigeria Deposit Insurance Corporation and the SEC had between 2018 and 2020 issued warnings on the lack of protection in investments in cryptocurrency.

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