CBDC Week: Another G7 Country Mulls Joining Digital Fiat Race
After the UK admitted it is mulling digital fiat plans this week, the Japanese government has also announced that it is considering the launch of a central bank digital currency (CBDC).
Per Nikkei, the cabinet is set to make a formal decision on whether or not it will include the issuance of a CBDC in its policy framework in the near future – adding that that should it do so, this would make digital yen issuance “official government policy.”
The government could include CBDC plans in its forthcoming budget plan, the Honebuto-no hoshin. The plan is formulated by 11 financial council members, including the central Bank of Japan (BoJ), and is chaired by Prime Minister Shinzo Abe.
Like its East Asian neighbor South Korea, Japan has long been of the opinion that a digital yen would not be necessary. But like Seoul, Tokyo appears to have made a dramatic u-turn – possibly as a result of China’s own digital yuan project, which Chinese media outlets say is already posed to start real-world pilots with two major firms.
Nikkei says that the Japanese government wants to make its move in conjunction with other major economies, and has been participating in CBDC study and research groups with European nations for several months.
The media outlet stated that the government and the BoJ are hoping to hold “full-scale talks with the United States and European countries” on the matter.
In February, the Japanese Ministry of Finance, the regulatory Financial Services Agency and the BoJ held three-party talks on CBDC research.
The Bank of England also admitted that it is mulling a CBDC launch this week, while the South Korean central bank launched a CBDC legal advisory unit, and the Bank of Lithuania opened a 'playground' for testing CBDCs.
Should Tokyo decide to go ahead with a digital yen launch, it would have no shortage of private companies ready to offer their assistance.
Readers may recall that a Japanese blockchain firm is currently piloting a token at a university in the country, as well as co-developing a digital fiat project with the Cambodian central bank.
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