It seems that Japan is planning to issue digital Yen as soon as possible. As part of a consortium of six central banks, including the United Kingdom, Sweden, and the EU, Japan appears to be approaching a slow but steady approach to a state-backed digital currency.
Japan aims to issue digital Yen
Japan should digitize its Yen within two to three years, and include that plan in important mid-year government policy guidelines. Currently, Japan cannot issue a digital currency soon due to technical and legal issues. However, it seems that the Japanese ruling party no longer wants to wait long. When Facebook announced the launch of its Libra global stablecoin project and China’s urgency towards its digital renminbi, it sowed the panic in Japan.
Among the major central banks that are actively promoting their digital currencies, China has emerged as a leader, although details of their projects are still scarce.
Japan’s State Minister in charge of vitalizing local economies Kozo Yamamoto speaks in Tokyo, Japan, August 3, 2016. Source: Reuters/Kim Kyung-Hoon/File Photo
Kozo Yamamoto, head of the banking and finance system research committee at the Liberal Democratic Party (LDP), said:
“Facebook’s push to launch its Libra cryptocurrency has raised questions about whether countries will continue to control money in the future. Therefore, Japan should soon digitize its Yen sooner. We will draft proposals for inclusion in government policy guidelines and hope to do so in the next two to three years.”
He explicitly stated that Japan should create a digital Yen, and this will happen within two to three years.
Japan also stated that it was waiting for input from the United States. As AZCoin News reported, as revealed by a senior lawmaker in Prime Minister Shinzo Abe’s ruling party, Japan is asking for closer cooperation with the U.S. to limit the potential impact of digital currency under the Chinese plan. Without help from the United States, lawmakers said they would not be able to counter China’s efforts to challenge the existing reserve currency and payment system.
Many top officials believe that if China’s digital currency is unregulated, it will boost the county’s digital hegemony on a global stage. It can also serve to dethrone the dollar as the leading global currency.
Japan has difficulties in technical and legal issues when launching CBDC
Japan cannot soon issue a digital currency due to technical and legal issues. Still, ongoing actions highlight the pressure that Tokyo feels before the progress of China, and Facebook has created out for digital currencies. In the CBDC race, China is the leader. Although no official timeline has been given for that, there has been a lot of speculation that Chinese D EP might even debut this year.
Not only Japan but also many other countries are concerned about the progress of both Libra Facebook and China. Technical and legal challenges remain on the path of digital Yen development and issuance.
However, Japan is still somewhat optimistic that individual countries can avoid future crises in their economies.
Yamamoto said:
“If each country manages to control the cash flow with its own (digital) currencies, that could prevent a big push at the time of the crisis and stabilize their economies.”
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