On March 30, the head of the Bank of Japan’s Financial Services Information Division Masashi Kuramoto published a summary Q&A called “Let’s think about cryptocurrencies!” for the general public in an educational site operated by the central bank.
The page offers a simple summary of responses to frequently asked questions (FAQs) surrounding cryptocurrencies. Questions pertain to their usage in the real world in areas like payments and remittances, their profitability as an asset and more.
One question is a notable standout, posing the query: “Shouldn’t it be better to ban something we don’t understand?”. To this, Kuramoto is quick to claim that cryptocurrencies have not yet me the objectives for which they were created in the first place – ‘cheaper remittance’ and to ‘support socially significant activities.’ However, the official added that cryptocurrencies, when matured sufficiently in the future, could usher in a new mechanism that could dramatically convenience people’s lives in society.
The central bank official notably added:
“To that end, it is important to actually try it in the world. There is reason to believe that [its maturity] will allow us to use existing cryptocurrencies, accumulate use cases and promote further technical development.”
Encouraging words aside, the central banker dismissed the notion that cryptocurrencies could be compared to fiat money like the yen or the dollar by claiming the latter are backed by central banks while cryptos do not see any issuer like a ‘central bank, corporation or a financial institution’ and therefore, according to him, lacks a user’s trust.
Kuramoto also pointed to the infamous January heist of Tokyo-based cryptocurrency exchange Coincheck where NEM tokens worth $530 million, at the time, were stolen. Kuramoto blamed Coincheck for fielding ‘insufficient’ fraud prevention safeguards while stressing that an investigation into the exchange and others are currently underway.
“[S]ince Japan is known worldwide as a country where virtual currency trading is popular, there is the possibility that bad guys around the world will look at the virtual currency traded in Japan and get various skills,” the official added, reminding investors and adopters to be wary of risks.