Central bankers are scrambling to make sense of digital forms of money. An official from the Bank of Japan declared last week to Reuters that cryptocurrency won’t replace physical money any time soon. He may be right, but that’s a different tune from the one government bankers from some other countries have been singing. The deputy governor of China’s central bank, for example, said late last year that “conditions are ripe for digital currencies.” (We also reported on Japan’s interest in a currency it was calling J-Coin earlier this year.)
This piece first appeared in our new twice-weekly newsletter, Chain Letter, which covers the world of blockchain and cryptocurrencies. Sign up here – it’s free!
So which is it? The truth is that every country is different, and the situation is often not so simple. In Sweden, for example, hardly anyone is using cash anymore, so the question is not whether digital money will replace physical money, but who will be responsible for supplying the digital money (for more: “Governments Are Testing Their Own Cryptocurrencies”). China’s government is probably interested in developing a cryptocurrency in part because this would give it more oversight over financial transactions (for more: “China’s Central Bank Has Begun Cautiously Testing a Digital Currency”).