Japan encourages G7 to explore CBDC together.
Leaders of the Ministry of Finance (MOF), the Financial Services Agency (FSA) and the Bank of Japan (BOJ) have recently held a number of meetings to examine the possible issuance of their own digital yen in the very near future.
The representatives discussed how the Japanese government’s creation of a central bank digital currency (CBDC) would impact the world economy which currently recognizes the US dollar as the de facto global currency. Meetings so far have also been centered around escalating research efforts.
Japan’s CBDC Push
As reported by Blockchain. News, with significant expertise in exploring digital currencies, six central banks: Bank of Canada, Bank of England, Bank of Japan, European Central bank, Sveriges Riksbank in Sweden, and the Swiss National Bank, along with the Bank of International Settlements (BIS) came together to create a working group to share experiences with use cases on CBDC.
The announcement explicitly stated that the working group would “assess CBDC use cases; economic, functional, and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies. ”
The meetings currently underway by Japan’s financial and monetary authorities demonstrate that they are ready to step up cooperation over digital currencies domestically in light of the advancements in digital and financial technology.
While digital currencies are expected to help lower costs related to cross-border financial transactions, such as remittances and settlements, there are concerns they may create opportunities for money laundering and other financial crimes.
Racing china
China’s state-owned bank, the People’s Bank of China (PBoC) has been reportedly charging full speed with its own CBDC development plans in response to Facebook’s Libra. China is not alone though as the social media giant’s attempt at issuing currency appears to have been the catalyst for the global CBDC race when national monetary authorities worldwide suddenly caught a glimpse of a future where they may very possibly not control the flow of credit.
Yamamoto who is Head of Bank and Finance Systems Research Commission at the Liberal Democratic Party (LDP), said that Japan should create a digital yen, “within two to three years” as reported by Blockchain.News.
The main changes included the establishment of requirements for suppliers of crypto-custodial services who are not involved in the purchase or sale of digital assets and do not act as an intermediary for such operations. Now they are also subject to the requirements of both laws. Crypto-derivative companies providing asset storage services may be required to register as cryptocurrency exchanges.
Earlier, the FSA reported that wallet operators do not fall under the regulation that existed before, so they do not buy or sell anything. Nevertheless, the department said that it is necessary to regulate such activities. There are currently 23 FSA-approved cryptocurrency exchanges operating in Japan. Some exchanges have already begun to change the terms of service to fix the restriction of access to their platforms for Japanese traders, such as BitMEX and Binance.
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