Lawmakers in Japan Working on a Digital Yen
- Around 70 lawmakers from Japan’s ruling Liberal Democratic Party are working on a proposal to have the nation issue its own digital currency.
- The nation’s abrupt change in its stance regarding CBDCs seems to have come thanks to the pressure exerted by the upcoming Chinese digital yuan.
Bank of Japan headquarters in Nihonbashi, Chūō, Tokyo. Kaisuke Ota/Nikkei Asian Review
Lawmakers from Japan’s ruling party are working on a proposal which would see the nation issue its own digital currency, Reuters reported on 24 January.
According to the Friday report, around 70 members of Japan’s Liberal Democratic Party feel that the upcoming Chinese digital yuan needs to be countered by their own digital currency. The group is led by the former Minister of the Economy, Trade and Industry, Akira Amari, and is planning to submit the proposal to the government sometime in February.
Like many similar initiatives around the world, the Japanese government is planning to jointly develop the digital yen with the help of private companies. Reuters further reported that Japan’s Prime Minister, Shinzo Abe, told the parliament that the government will work with the Bank of Japan (BoJ) on examining digital currencies, and on finding ways to enhance the yen’s convenience as a settlement means.
Takahide Kiuchi, former BoJ board member, reportedly said:
“The BOJ probably won’t want to do anything that would stifle private-sector innovation. The best way could be to issue a hybrid-type digital currency that is operated and issued by private firms, with the central bank’s involvement.”
The new initiative seems to counter what the BoJ stated back in April 2018, when the bank said that it had no intention to issue a Central Bank Digital Currency (CBDC) to consumers, as it could undermine the existing two-tiered system and affect financial stability. Last June the bank also stated that issuing a digital yen would mean dropping cash.
Nevertheless, the bank seems to be keeping an open mind as of late. Earlier this week, it joined five other banks in creating a working group with the Bank of International Settlements, with the goal of sharing experiences and study the potential use cases for CBDCs.
- The head of China’s central bank digital currency institute said the e-CNY has undergone a major upgrade, and should be made available as an option in all retail scenarios.
- The PBOC official noted that platforms can integrate the CBDC in the short term using QR codes, and focus on upgrading their payment tools in the long run.
Office building of the People’s Bank of China. Flickr
- The Japanese exchange has adopted new AML measures in order to comply with the Japanese governments implementation of FATF’s Travel Rule.
- Transaction restrictions will be applied to 21 countries that follow the Travel Rule, though transfers to countries not on the list will still be supported.
- The current governor of Florida, Ron DeSantis, announced he is joining the race for the 47th president of the U.S. during a Twitter Spaces event on Wednesday.
- During his speech DeSantis declared his support for Bitcoin and the wider crypto space, noting that if Joe Biden is re-elected “they’ll probably end up killing it”.