A former representative of the Japanese Central Bank shared his point of view on the issue.
Japan should be more serious about issuing a digital version of the yen. The country has several reasons for this. This conclusion was reached by a former representative of the Japanese Central Bank (BoJ), chief researcher at the Nomura Research Institute Tetsuya Inoue, reports CoinDesk.
The specialist drew attention to the fact that the national currency of Japan is trusted. This situation, in his opinion, gives the local central bank a deferral to release the fiat cryptoversion (CBDC). At the same time, the financial regulator, according to Tetsuya Inoue, should pay great attention to studying the issue of creating a digital yen.
Problem # 1 – working according to the old scheme
One of the reasons that, according to the specialist, should force BoJ to tackle the problem more closely is the fast change of the payment infrastructure. Following the release of digital currencies, according to Tetsuya Inoue, new instruments will appear for carrying out transactions with assets.
Lack of modern technical solutions and infrastructure for making developments, in his opinion, may negatively affect the position of the yen. One of the reasons is the low competitiveness of traditional fiat against more advanced digital financial systems.
Problem # 2 – competition
The specialist also drew attention to the risks of monopoly formation in the financial market. Such a scenario, in his opinion, may occur if the developments of one of the countries become widespread. In this case, it will be difficult to compete the leader, or getting close to him, according to Tetsuya Inoue.
At the moment, China is the closest to the release of the national cryptocurrency. It is noteworthy that local regulators have not limited themselves to the development of the crypto version of the currency. Simultaneously, the PRC launched a national blockchain network and a number of other related projects that reflect the country’s desire to follow the path of technological development.
Japan’s crypto initiatives
At the moment, Japanese financial regulators are studying the prospects for issuing a national cryptocurrency. It is noteworthy that back in the summer of 2019, BoJ was against the initiative. The situation changed in the fall of 2019 amid the risks that Japanese financial regulators saw in the potential release of China’s national cryptocurrency.
In early 2020, information appeared on the network that the crypto version of the yen could appear on the market within a couple of years. In early July, the Japanese Central Bank announced its intention to test a new financial instrument. By the end of the month, the Bank of Japan included the development of CBDC in the list of tasks with the “highest priority”. Later, information appeared on the network that the chief economist of the Japanese Central Bank would be engaged in the creation of the national cryptocurrency.