Will Japan be the Next Country to Roll Out Central Bank Digital Currency?
Following detailed discussions about cryptocurrency rules by finance ministers and central bank governors at the G-20 conference, Japan has started paying attention to the domestic crypto sector.
Chiefs of the Bank of Japan (BOJ), Ministry of Finance (MOF), and Financial Services Agency (FSA) have conducted several meetings to ascertain whether the nation should be the next in the list of countries adopting a central bank digital currency.
The problems being discussed include the likely impact on world economy by a central bank digital currency from Japan.
Notwithstanding the arrival of several cryptocurrency exchanges, the US dollar remains as default global currency.
Japan, which continues to lead crypto sector, is also taking proactive steps in adopting blockchain technology.
The government believes that economy could benefit from the adoption of digital currency. Nevertheless, similar to other countries, Japan encounters issues such as financial violations, network breach, and money laundering as cryptos turn out to be common.
In January, a meeting took place to solve problems related to cypto took place. Those attended the meeting were Ryozo Himino, Yoshiki Takeuchi, vice minister of finance for international affairs, FSA vice minister for international affairs and Shinichi Uchida, BOJ executive director for international affairs.
Specifically, the BoJ intends to get ready for challenges associated with Japan adopting a crypto currency. Earlier, Governor Haruhiko Kuroda had stated that there was no call for a state backed crypto in Japan, but still acknowledged the fact that a need could arise after the risks and regulatory concerns are addressed in a convincing manner.
“We are advancing research and study from the technical and legal perspectives so that we will be able to move in an appropriate way when there is a growing need.”
To a certain extent, overseas developments are acting as catalyst to CBDC related debates in Japan. The People’s Bank of China has started a two-year trial program to evaluate digital yuan dealings. Beijing has specifically told that any cryptocurrency in China should add value to the yuan and not attempt to substitute it.
The Bank of England, the European Central Bank, and central banks in Sweden, Canada, and Switzerland have stated that they would carry out a joint research on cryptocurrencies with BIS (Bank for International Settlements). In the meantime, the US International Revenue Service is getting ready to conduct a crypto conference in March.