After the recent development of the Digital Yuan by China, Japan is assessing the need for a digital Yen to counter the massive development of cryptocurrency. The finance ministers and central bank governors are having meetings to analyses the need for a Government-backed Central Bank Digital Currency (CBDC) and its probable impact on Japanese as well as the world economy. Lately, a Japanese lawmaker had publicly asked to escalate the matter of development of digital Yen.
Financial Service Agency (FSA) vice-minister for international affairs, Ryozo Himino and Bank of Japan executive director Shinichi Uchida and were the prominent personalities among the people attended the last meeting held to address the issues and impact related to CBDC.
In the past, the Bank of Japan commented on the importance of addressing the issues raised due to the demand for government-backed digital currencies. The Governor of the Bank of Japan revealed that Japan is not in the race of developing a central digital currency, however, they are closing monitoring the global situation and development. Also, the assessment and research to understand its legal and technical perspectives are continuing to prepare beforehand in case of any future demand.
Japan is not alone in the race
Along with Japan, other world economies are also working to understand the impact of using cryptocurrency and address the concern raised on its use as legal tender. There is no country in the globe that has adopted a digital currency as a legal tender so far, however, the massive growth of blockchain-based projects and a myriad of cryptocurrencies have created an alarming situation and urgent need to bring a proper regulatory law. In a recent report, the United States also disclosed that it’s working hard on the development of the digital dollar.
The digital currencies reduce the fees applies on cross border transactions drastically, also they have many advantages over the traditional fiat money. At the same time, the governments are facing several concerns like hacking, money laundering, terrorism funding and other illegal usages of digital currencies.