According to a new report published by Reuters, Japan might be the latest nation in line to consider launching its own digital currency. The CBDC (Central Bank Digital Currency) trend was kicked off by China back in 2019, a few months after Facebook announced its own upcoming stablecoin, Libra.
With Facebook and China both preparing their own digital coins, many countries have started similar initiatives in order to have a chance in the new, competitive field. If Japan is joining the race as well, it is likely due to similar concerns.
As per Reuters, the confirmation that Japan is looking into a possibility of ‘digital yen’ came from Norihiro Nakayama, the country’s parliamentary vice-minister for foreign affairs. he said that having its own digital currency would allow Japan to keep up to date with global developments in the financial sector.
However, he added that the project might require a collaboration between the private sector and the government.
Japan’s officials are concerned about China’s digital yuan
Japan has been one of the crypto-friendliest countries in the world for quite a few years now, and it was the first to start accepting Bitcoin payments. Despite this, 80% of purchases within the country are still made with cash, so developing native crypto might inspire its citizens to start using digital money more, like other nations in the region.
Taro Aso, Japan’s finance minister, also previously spoke regarding China’s steps towards developing a CBDC, stating that this might be a ‘very serious problem.’ This is due to the fact that China might start using digital yuan for settlements, while Japan still uses dollars.
Now, the country’s Liberal Democratic Party works on preparing its own crypto proposal, which it plans to submit in early February 2020. Meanwhile, the Bank of Japan was mentioned as one of the central banks that have recently joined forces to study cryptocurrency, although the legitimacy of these claims remains uncertain.