Japan Intends to Include Central Bank Digital Currency in Mid-Year Policy

Many central banks are studying the central bank’s digital currency (CBDC), and the Bank of Japan has previously joined forces with the European Central Bank, the Bank of England and the Bank for International Settlements (BIS) to set up working groups to promote development. Today, the ruling party, Liberal Democratic Party’s, financial survey chairman Kozo Yamamoto said in an interview with the media that he would propose a draft in the government’s mid-year policy guidelines, hoping to promote the yen’s central bank’s digital currency in two to three years.

According to Reuters, Koyama Yamamoto, who is also a member of the Japanese House of Representatives, believes that Japan should have its own central bank digital currency and hopes that the related development will be faster and better. If each country has a digital currency to control the flow of funds, it may prevent the currency from violently fluctuating during a crisis in the country, thereby stabilizing the economy. He also said that when the scope of the central bank’s digital currency gradually expands, it will have the opportunity to destroy the hegemonic position of the US dollar globally, but this measure will help stabilize emerging markets and reduce their dependence on the US dollar.

As global central banks have begun to study related fields, the United States has indicated that it will actively promote development at the level of private institutions, such as Facebook’s Libra and the Federal Reserve Board at the government level. As for the related deployment of the People’s Bank of China, there may be more progress within this year, or the Japanese government may feel the pressure. Some Japanese lawmakers have pointed out that the launch of China’s central bank digital currency may be widely adopted in emerging markets, thereby promoting China’s Internet hegemony and the Belt and Road initiative.

Yamamoto Kozo is the main helmsman of Japanese Prime Minister Shinzo Abe’s economic policy, while another important Liberal Democratic Party figure and former Minister of Economy and Finance, Gan Liming, also made similar proposals, hoping to compete with China’s central bank digital currency. Yamamoto said that he would cooperate with Gan Liming and urged the Japanese government to adopt their proposal.