Japan's second oldest bank symbol has said that central banks cannot use digital currencies to enforce negative interest rates, Reuters reported on July 5.
Speaking at an event held by the publication, Masayoshi Amamiya, deputy chairman of the Bank of Japan said states issuing digital currency at a negative interest rate will force residents into cash.
This money supply will remain, Amaiya said, and despite the current trend of replacing it, no government would actually do so.
"To overcome the nominal zero rate, central banks would have to eliminate money," he hinted.
"Elimination of money would make the settlement infrastructure inconvenient for the public, so no central bank would do this."
Negative interest rates refer to banks that charge deposit holders to keep them invested. Japan was one of the countries that took up the exercise in 201
At that time, Cointelegraph reported on the possibilities of decentralized cryptographic curves such as bitcoin (BTC) to provide a safe alternative to paying effectively for spending money.
Japan's bitcoin infrastructure is more advanced than most, with an extensive regulatory system that allows the emergence of bonafide exchanges and thousands of bitcoin-accepting merchants.
Other jurisdictions that are more hostile to bitcoin have in recent times either issued or announced their intention to issue, a state-funded digital currency.
These include Venezuela, which already launched Petro as well as India and Iran. The latter have both declared bitcoin as de facto illegal.