PLD members want to propose the development of the digital yen to the nation

According to a Reuters report, some 70 legislators from Japan's Liberal Democratic Party believe that a digital yen is needed to thwart Libra and the Chinese digital currency, two projects in advanced development.

A collaboration between government and private individuals

The plan – aimed at keeping Japan at the forefront of fintech innovation – would be based on collaboration between the government and the private sector, deputy deputy minister for foreign affairs told Norihiro Nakayama news agency.

"China is moving towards the issue of digital yuan, in response to this we would like to propose measures to counter these attempts," said Nakayama. In the initial phase of the project, extensive research would be planned to investigate the possible prospects of digital currency.

The ruling party group is led by former Minister of Economy, Trade and Industry Akira Amari and will likely submit the plan to government next month.

The Japanese central bank does not support the proposal

The initiative would appear to oppose the opinion of the country's central bank, which said last June that issuing a digital yen would mean losing money. "The elimination of liquid money would make the use of the new payment infrastructure inconvenient for the public, as a result no central bank would find it convenient to accept it," said Masayoshi Amamiya, deputy governor of the Bank of Japan (BoJ). However, he seems to want to leave open the possibility of going in that direction in the future.

Recently, the BoJ has joined a partnership with five other banks to form a new working group in collaboration with the Bank for International Settlements, with the aim of sharing the results of research on the potential achievements of digital currencies by central banks. national. In addition, Reuters says that Japanese Prime Minister Shinzo Abe has told parliament that the government will work with the BoJ to study digital currencies and specifically consider the idea of ​​a yen launch in the crypto sector.

Regarding the development of the yen cryptocurrency, former BoJ board member Takahide Kiuchi said in the report that the central bank would commit to avoid limiting innovation in the private sector. "The best way could be to issue a hybrid digital currency managed and issued by private companies, with the involvement of the central bank," he said.

When the Libra project, led by Facebook and supported by the Libra Association, was announced last summer, Japanese regulators expressed concern about the potential risks of launching a possible stablecoin. Shortly thereafter, Japan formed a working group that would do a thorough research on the topic before the G7 meeting in France, to discuss with the international partners the prospects of the crypto sector.