Japan might to issue a digital Yen to against with Libra and China digital Yuan

A team of about 70 lawmakers from Japan’s ruling Liberal Democratic Party is said to be working on a proposal to issue digital Yen. This seems to be a response to concerns about the Chinese Digital Yuan, according to Reuters reported on January 24.

Norihiro Nakayama

Norihiro Nakayama, parliamentary vice-minister for foreign affairs, said the digital currency could be a joint initiative between the government and private companies that will bring Japan in tune with global changes in financial technology. Mr. Nakayama added that the group plans to submit a proposal to the government early next month.

Deploying the digital yen will take some time as Japan starts late. This decision shows a major change for the nation, which the central bank representative saw “no need” for CBDC by the end of December 2019.

While Japan is unlikely to issue digital currency anytime soon due to technical obstacles and legal hurdles, but the move comes after the Bank of Japan decision to join six other central banks to share expertise in the future.

The Bank of Japan has partnered with five other major central banks – the Bank of England, the Bank of Canada, the European Central Bank, the Swiss National Bank, and Sveriges Riksbank (Sweden) – to explore the types of digital currencies.

Especially, the nation’s Prime Minister Shinzo Abe also told parliament today that the government will work with the Bank of Japan in researching digital currencies and seeking ways to increase the convenience of Yen as a settlement means.

Facebook pushed hard to launch its Libra cryptocurrency which has prompted central banks to speed up the pace they look at the issuance of digital currencies. Among the major central banks, China has emerged as a leader in its own attempt to create its own cryptocurrency, although details about its project are still scarce.

Former BOJ board member Takahide Kiuchi said China and Japan have different reasons to consider issuing digital currencies. For China, the motivation is to improve the yuan’s clout in the global community. For Japan, it will change the country’s cash-loving culture.

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