Lawmakers Want Digital Yen To Counter China

A group of 70 legislators of the Japanese Liberal Democratic Party calls for the creation of a digital yen in order to counter the project of cryptocurrency of the China.

According to Norihiro Nakayama, Parliamentary Deputy Minister for Foreign Affairs, the project could be a joint initiative between the government and private actors, reports Reuters.

“The first step would be to study the idea of ​​issuing a digital yen. The China is moving towards the broadcast of a digital yuan, so we would like to suggest measures to counter these attempts, ”he said.

While China seems to be approaching the launch of its crypto-yuan, the group of Japanese politicians plans to submit a proposal as early as next February.

Takahide Kiuchi, former member of the board of Bank of Japan (BoJ), however, explained that the China and the Japan had different goals with their future digital piece.

The China wants to strengthen the weight of the yuan internationally; for the Japan, it would be to change the culture of the country that loves species. The BoJ is unlikely to want to do anything that stifles innovation in the private sector. The best way could be to launch a hybrid digital currency that is operated and issued by private companies, with the participation of the central bank, ”he said.

The announcement of Facebook Libra in June 2019 prompted a number of central bankers to take more interest in this new type of blockchain-based currency.

At the start of the week, the ECB, the BIS and five major central banks, including the BoJ, have announced that they are joining forces to better assess the potential of digital currencies.

According to a BIS report, now 20% of the 66 central banks surveyed plan to launch a digital currency within six years.

Last year, the deputy governor of the Bank of Japan declared that the central bank digital currencies – often abbreviated CBDC – could "erode the credit circuits of commercial banks and have a negative impact on the economy".