The successes of other countries in the development of the state digital currency are forcing the Japanese authorities to accelerate the creation of the digital yen in order to preserve economic security.
Japanese Minister of Economic Security Takayuki Kobayashi called for accelerating the launch of the state digital currency. This is due to the fact that many countries, including China, have already made great strides in this direction.
“We need to think about what could happen to Japan’s national security if other countries move forward in the development of digital CB currencies. Japan needs to speed up the development and testing process so that it is ready to issue the digital yen at any time. ”
His concern is well founded. The Bank of Japan only began the first phase of the digital yen experiment in April and says that the pilot programs will not begin until 2023. Unlike Japan, China already in 2021 tested the digital yuan in several major cities for the possibility of launching it in 2022 during the Winter Olympics.
The initiatives of Kishida, who has prioritized the launch of the state digital currency, may well accelerate this process in Japan. His position will be supported by many members of the ruling and opposition parties, who view the digital yuan as a threat to the dollar and the financial dominance of the United States, Japan’s largest ally. Experts believe that the plans of its American and European colleagues to issue the Central Bank’s digital currency may serve as an additional incentive to accelerate the issuance of the state digital currency by the Bank of Japan.
In contrast, the Bank of Japan does not believe that the plans of China and other countries will affect the timing of their experiments with the state digital currency. In October, the chief executive of the Bank of Japan, Shinichi Uchida, said that the digital yen should be as simple and convenient to use as possible. It needs to interact with any payment services, since the main purpose of issuing the digital yen is to provide the population with a convenient and effective means of payment.
The situation with the digital yen was well described by the MP of the Liberal Democratic Party of Japan Hideki Murai, who said that only by the end of 2022, lawmakers will have a “clearer idea” of what should be the state digital currency of Japan.