Japan jolts towards development of digital yen to combat Chinese digital yuan
Updated: Feb 18, 2020
Kozo Yamamoto, Head of the Research Commission on the Finance and Banking Systems at the Japanese Liberal Democratic Party (LDP), has urged Japan to create its own yen digital currency “within two to three years”, and include such plan in the government’s mid-year key policy guidelines.
Yamamoto said (on the proposed digital yen):
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.
His comment was followed by a similar proposal led by former economy minister Akira Amari, who reinforced the significance in issuing a digital yen to counter China’s accelerated progress towards issuing its own digital currency.
Yamamoto is widely known in Japan as an architect of Prime Minister Shinzo Abe’s “Abenomics” stimulus policy, and stated that he would work together with Amari to encourage the government to consider and adopt their proposals.
This is a clear indication of central banks across the world quickening the pace at which they are looking at issuing a central bank digital currency, as China have not only emerged as clear front runners, but are extending the gap as the months go by.
The People's Bank of China have even recently stated that the “processes of top-level design [of the digital yuan], setting industry standards, developing potential functions and integration testing were almost complete.”
Some Japanese lawmakers believe that China’s planned digital currency could spread widely among emerging economies and may be used as a method to help China advance its digital hegemony and further its Belt and Road Initiative (a global development strategy adopted by the Chinese government in 2013 involving infrastructure development and investments in nearly 70 countries and international organizations in Asia, Europe, and Africa).
Nonetheless, the ears of Japan have well and truly been perked, and with the launch of digital yuan ever so near, we can be sure to hear some solid updates on the development of the digital yen in due course.