Japan takes note of this at home with finance ministers and central bank governors who recently discussed the cryptocurrency regulation at the G-20 summit. Leaders at the Bank of Japan (BOJ), the Ministry of Finance (MOF) and Financial Services Agency (FSA) have held a number of meetings to determine whether the country should become the next to accept a government-sanctioned digital currency to take.
Among the issues at stake are how the Japanese government that embraces a digital bank from the central bank (CBDC) would influence the world economy. Despite the emergence of countless crypto exchanges, the US dollar has remained the de facto global currency.
As the birthplace of cryptocurrency, Japan is often ahead of the global package when it comes to the use of blockchain technology. The economy is perhaps best served by the use of a digital currency. However, like other countries, it faces the same concerns about hacking, financial crime and money laundering as such currencies grow.
The last meeting to address such issues took place in January. Among those present were Ryozo Himino, FSA Deputy Minister for International Affairs, Yoshiki Takeuchi, Deputy Minister of Finance for International Affairs, and Shinichi Uchida, BOJ Executive Director for International Affairs.
In particular, the BOJ intends to be prepared for issues related to Japan using a digital currency. Governor Haruhiko Kuroda previously stated that there was no demand for a state-sanctioned digital currency in Japan, yet acknowledged that one could arise once the regulatory challenges and risks were properly addressed:
“We promote research and study from a technical and legal perspective, so that we are able to move appropriately when there is a growing need.”
Developments abroad can fuel these discussions in Japan. The People’s Bank of China started a two-year pilot program to review digital yuan transactions. Beijing has made it clear that any digital currency in China would complement the yuan and not replace it.
The Bank of England, the European Central Bank and central banks in Sweden, Canada and Switzerland have announced that they will conduct a joint digital currency investigation with the Bank for International Settlements. Meanwhile, the US Internal Revenue Service is preparing for a cryptocurrency summit in March.