Japan’s Lawmaker Calls For Development of Digital Yen to Counter China

Another Japan’s lawmaker called for the urgent creation of the digital yen.

Kozo Yamamoto, the head of the banking and finance systems research commission at Japan’s Liberal Democratic Party, stated on February 10 that the country should introduce a digital yen in two to three years.

According to Reuters report, Yamamoto stated that Japanese government should include central bank digital currency (CBDC) it the mid-year policy guidelines. He noted that digital currencies may penetrate emerging economies rapidly and assist China — who is developing its CBDC — in advancing its digital hegemony. This means, he said, that digital yen must be developed quickly:

“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. […] If each country manages to control flows of money with their own (digital) currencies, that could prevent a big swing at a time of crisis and stabilize their own economy.”

Yamamoto’s statements are in concord with those of ex-economy minister and ruling party member Akira Amari, who stated that he wants to launch CBDC to counter China’s forthcoming digital yuan. Yamamoto agreed that, though CBDCs’ proliferation may undercut the dollar’s domination, it could also stabilize emerging markets dependent on dollar like Cambodia.

Japan’s push for digital currency research

Japanese lawmakers have recently urged the government to place digital currencies on the G7’s agenda this year. Moreover, in late January, the deputy governor of the Bank of Japan said that the institution has to be prepared to launch its own digital currency, digital yen, in case quick technical advances in settlement systems accelerate public demand.

In the meantime, China’s central bank recently finished the top-layer design and joint testing of the digital yuan.