Japan LDP Pushes for Digital Yen Launch
Japan’s Liberal Democratic Party (LDP) suggested on Monday to include the digital yen plans on the mid-year key policy. And should have the said currency preferably within two to three years.
LDP head of research commission on finance and banking systems Kozo Yamamoto stated that they will draft proposals to be included in the government’s policy guidelines. Moreover, hopefully making it happen in two to three years.
Still, the technical and legal aspects of the plan make it unlikely that Japan would launch a digital currency right away.
The Bank of Japan has been looking at the possible issuing of a digital yen. However, it made no immediate plans to launch one.
The ongoing moves by the ruling party, though, underlines the pressure the country is experiencing amid China’s and Facebook’s progress on digital currencies.
Countering Digital Yuan’s Impact
Yamamoto’s comments came as Facebook seeks to establish a global financial footprint through the introduction of its Libra cryptocurrency.
It also followed similar remarks from another group of Japanese lawmakers. Who are furthermore, led by ruling party heavyweight and former economy minister Akira Amari.
The group from the LDP has pushed the country’s financial authorities. Forcing them to immediately decide on whether to issue a digital yen to offset the impact likely to come from China’s soon to launch digital yuan.
The LDP lawmakers led by Amari believed a quick adoption of the digital yuan could turn it into a major currency like the US dollar. Which, in turn, might affect Japan.
Yamamoto said he intends to work closely with Amari to urge the government to approve their proposals.
Central banks around the world have also sped up their study on introducing central bank digital currencies (CBDCs).
Out of the central banks, the People’s Bank of China (PBOC) takes the lead in the race to develop its own digitized money. Although, details of the project remained short.
Some Japanese lawmakers see China’s digital yuan potentially spreading widely among developing economies. The country uses the currency to boost its digital hegemony as well as its Belt and Road Initiatives.
The spread of digital currencies might weaken the greenback’s dominance. But it could help support developing economies such as Cambodia. According to Yamamoto, Cambodia heavily relies on the dollar.
If each country manages to control the flows of money with their own digital currencies, that could prevent a big swing at a time of crisis. As a result, stabilizing their own economy, he stated.
