Japan’s financial authorities to step up cooperation and develop CBDC

on Feb 22, 2020
Updated: Mar 11, 2020
  • Japan's financial and monetary authorities revealed to have been meeting in an effort to discuss and study crypto.
  • The meeting executives seem to be concerned about the impact of China's digital yuan.
  • Presently, the authorities are still discussing and researching crypto, although they have many concerns regarding the potential misuse of crypto for performing financial crimes.

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Japan is currently fighting a curious inner battle, where its Ministry of Finance, its central bank, and its Financial Services Agency are holding meetings regarding digital currencies. The country’s financial and monetary authorities are doing more than exploring regular cryptocurrencies, however, and they are also considering the possibility of launching a CBDC.

According to new reports, problems coming from central bank-owned coins are a major topic for the authorities, and they are expected to be discussed on meetings with Saudi Arabia’s finance ministers and the bank chiefs over this weekend.

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However, there is no doubt that the reason that all of these officials are in a rush to discuss the matter comes from the fear of the influence that China’s upcoming digital yuan might have once it finally sees launch.

Due to such concerns, the BOJ, FSA, and MOF have already been holding multiple meetings to date. During the events, their officials discussed the potential benefits of digital currencies, possible economic impacts, technological aspects, and more, as some sources reported.

Financial authorities’ executives concerned about crypto’s role in crime

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The sources added that the most recent of those meetings happened in January 2020, and it involved BoJ executive director for international affairs, Shinichi Uchida; vice minister of finance for international affairs, Yoshiki Takeuchi, as well as vice minister for international affairs at FSA, Ryozo Himino.

The three allegedly spoke about the impact of cryptocurrencies on the global currency system, that currently revolves around the dollar. Meanwhile, about a month ago, a group involving the Bank of England, European Central Bank, the Bank for International Settlements, the Bank of Japan, as well as central banks of Canada, Switzerland, and Sweden announced joint plans to study cryptos.

All of these banks recognize cryptocurrencies’ ability to lower the cost of payments, especially when it comes to cross-border ones. With remittances and international settlements being such a big part of the financial world, there are concerns that new opportunities for money laundering may emerge along the way.

It is also worth noting that the BoJ has not yet started studying actual issues related to creating a CBDC, but they are advancing research regarding technical and legal matters.