A Japanese central bank digital currency will help the integration between cryptocurrencies and the traditional financial system, according to Oki Matsumoto, head of the Japanese financial services firm Monex Group, which owns crypto exchange Coincheck.
According to a Nov. 25 Reuters report, Matsumoto said that CBDCs will boost crypto trading by rendering the conversion of cryptocurrencies into legal tender more convenient. He said:
“It would make the cryptocurrency market more lively.”
Matsumoto said that he appreciates Bank of Japan’s plan to study the development of a digital currency and that he believes it will help the country move toward a more efficient, digitized economy. As Modern Consensus reported in late January, Japanese lawmakers are working on a proposal for the country to issue its own CBDC, which could be created in collaboration with private companies.
Japan seems hellbent on growing its cashless economy, while its citizens stubbornly continue to use banknotes. An initiative announced about a week ago saw 30 firms collaborate to tackle the extremely fractured nature of Japan’s cashless payments market. The companies—which include telecoms firms, retailers and brokerages—will jointly issue “a digital currency that will use a common settlement platform.”
Matsumoto explained that “CBDCs will significantly enhance the interoperability of cryptocurrencies.” He explained that many minor virtual asset service providers (VASPs, as international regulators prefer to call exchanges) do not hold bank accounts, which complicates their operations. A digital currency would let them easily access the financial system.
Such integration means that the conversion from cryptocurrency to legal tender—and back—would become far easier and more efficient. If Matsumoto is right, then we could see a rather bright future for cryptocurrency services—particularly since a Bank for International Settlements survey of central banks revealed that it expects one-fifth of the world’s population to use CBDCs in 3 years.
Matsumoto himself is involved in the cryptocurrency space, considering that Monex is the owner of major cryptocurrency exchange Coincheck. Still, the financial services company is far from being a crypto firm, with $533 million in revenue derived mainly from online security services, foreign exchange trading, and M&A advisory services.