Since the unveiling of Facebook’s Libra, the stablecoins world has developed rapidly. China was among the first nations to announce that it will create a digital Yuan. It hastened the development process to contend with the Libra project. Other countries opposed the creation of a global stablecoin citing financial instability around the world.
Now, Japan seems to be following China’s lead in the development of a central bank digital currency (CBDC) unleashing its token dubbed the digital Yen. Another Japanese lawmaker has publicly called for the rapid development of the digital Yen.
Kozo Yamamoto, the head of the banking and finance systems research commission at Japan’s Liberal Democratic Party, spoke. On February 10, he said that the country should now consider creating a digital yen. That should happen in the next two to three years.
A February 10 Reuters report stated that Yamamoto had the opinion of the Japanese Central Bank, including plans for its CBDC in the government’s mid-year policy guidelines. He said that digital currencies could rapidly spread in the emerging economies and help China advance its digital dominance.
Since China is already working on a CBDC, Yamamoto said that development of the digital yen must be quick:
“The sooner, the better; we’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years. […] If each country manages to control flows of money with their own (digital) currencies; which could prevent a big swing at a time of crisis and stabilize their economy”
The legislator’s remarks follow the ones of Akira Amari, the former economy minister and ruling party member, who stated that he aims to issue a CBDC to compete with China’s imminent digital Yuan. Yamamoto admitted that, while the spread of CBDCs may soon undermine the dollar’s supremacy, it may also stabilize emerging markets that rely on the dollar like Cambodia.
Japan Looks At Digital Currencies
Recent news revealed that the Japanese lawmakers have called on their government to push for digital currencies to feature on the G7’s agenda this year. Additionally, at the end of last month, the deputy governor of BOJ (the Bank of Japan) said that the institution must be ready to issue a CBDC if public demand surges responding to technical developments.
In the meantime, China’s central bank recently completed its top-layer design and joint testing of the digital Yuan.