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JAPAN FEARS CHINA’S DIGITAL CURRENCY, SUGGESTS TIMELINE FOR DIGITAL YEN

Rumors that Japan was preparing plans for a digital yen have been confirmed today. A senior ruling party lawmaker Kozo Yamamoto stated: “the sooner the better.”

DIGITAL YEN TO COUNTER LIBRA THREAT

As part of a six-central-bank coalition including the UK, Sweden, and the EU, Japan appeared to be taking a slow but steady approach toward a state-backed digital currency.

However, it seems that the Japanese ruling party no longer wants to wait. Facebook’s push to counter nation-states’ control over money coupled with China’s progress on its digital RMB has planted the seed of panic in Japan.

This Monday, Yamamoto, who is head of research commission on finance and banking systems at the Liberal Democratic Party (LDP), confirmed that the threat from corporations like Facebook was too big to wait in the sidelines.

He stated unequivocally that Japan should create a digital yen and that this would happen:10 BTC & 20,000 Free Spins for every player in mBitcasino’s Winter Cryptoland Adventure!

within two to three years.

JAPAN’S FEARS OVER CHINA ARE FAR GREATER

Bitcoinist reported last week that the coalition had set a date for April to discuss how best to counter the rising threats from Facebook and China. 

Japan also stated that it was waiting for input from the United States. Without help from the U.S., lawmakers said they would be unable to “counter China’s efforts to challenge the existing reserve currency and international settlement system.”

But today, Japan has stepped things up a gear. Yamamoto’s comment about Libra comes at a time when other lawmakers in the country are echoing his concerns.

Many top officials believe that if China’s digital currency goes unchecked, it will advance the county’s digital hegemony on the global stage. It could also serve to dethrone the dollar as the leading global currency. 

“The sooner the better,” Yamamoto told Reuters:

We’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years.

TECHNICAL AND LEGAL DIFFICULTIES WILL SLOW EFFORTS DOWN

It has to be said, when it comes to the CBDC race, China certainly has the headstart. While no official timeline has been released for that, there has been plenty of speculation that it may even come out this year.

That won’t be the case for Japan. For as much as the country fears the progress made by both Libra and China, there are multiple technical and legal challenges on the path to its digital yen.

However, Japan remains somewhat optimistic that individual countries can avoid upcoming crises in their economies. Yamamoto said:

If each country manages to control flows of money with their own (digital) currencies, that could prevent a big swing at a time of crisis and stabilize their own economy.

Do you think China’s digital currency is a cause for concern? Add your thoughts below!

Images via Shutterstock

The Rundown

  • Digital Yen to Counter Libra Threat
  • Japan’s Fears Over China Are Far Greater
  • Technical and Legal Difficulties Will Slow Efforts Down

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Currency

Bank of Japan Deputy Governor Amamiya: Cheaper CBDCs could stifle private sector innovation

  • BoJ deputy governor foresees CBDCs affecting countries’ financial intermediation due to a shift in funds.
  • Central banks have to learn the pros and cons of CBDCs and seek ways to mitigate the risks.

The deputy governor of the Bank of Japan (BoJ) Amamiya in recent remarks says that central banks are bound to remain lenders of some kind even at the time when digital currencies are issued. Therefore, there is a need to carry out a monetary policy through the control of digital money flows.

Amamiya believes that central banks considering issuing their own digital currencies around the world should “conduct a comprehensive study on how it affects the country’s settlement and financial systems.” The deputy governor also warned against issuing cheaper central bank digital currencies (CBDCs), which is likely to stifle innovation in the private sector.

Moreover, if we reach a point where households and businesses start to prefer CBDCs over bank deposits then that could affect countries’ financial intermediation through shift in funds. Lastly, Amamiya said that central banks must seek to learn the pros and cons of CBDCs and explore ways on how to mitigate the risks

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No Cigar: Coronavirus Outbreak Forces China to Delay Digital Currency Plans

Despite the efforts to contain the coronavirus outbreak of COVID-19, the epidemic continues to cross the globe, with many other countries reporting relatively substantial spreads of the virus.

In South Korea, for instance, the number of cases has reached 1,600, from the sub-100 count seen just a week ago, and in Italy, too, the coronavirus is rapidly spreading.

Understandably, this has started to affect many facets of the world’s economy and daily living — Bloomberg reported that the count of visitors arriving in Hong Kong is down over 90%, companies like Apple and Samsung have started to see the outbreak affect their business, and many across the world have been forced to stay home from work and school amid the unrest.

The damaging effects of the outbreak were accentuated on Tuesday, when a Chinese state-run media outlet confirmed that the coronavirus has hampered the development of the People’s Bank of China’s (PBOC) digital currency plans.

Chinese Media: Digital Currency On Hold as Coronavirus Spreads

If you’ve followed the crypto news cycle over the past few months, you’ve likely seen the near-incessant stream of reports that China’s central bank, the PBOC, is on the verge of launching its own digital currency, branded the “DCEP” by reports from local media.

In fact, a December report from Caijing, which cited individuals familiar with the PBOC’s operations, suggested that the central bank was going to roll out a pilot program for the national crypto asset at the start of 2020 in Shenzhen and another municipality.

Despite other reports corroborating the idea that the PBOC was done the base layer development of their digital yuan, nothing came of the Caijing report and others like it. The reason: coronavirus.

According to a recent report from The Global Times — an English news outlet closely affiliated with the Chinese Communist Party’s de-facto media mouthpiece, The People’s Daily — “sources close to the matter” say “China’s research into its sovereign digital currency has been delayed from the first quarter due to the outbreak of the coronavirus.”

The source elaborated that the outbreak has forced staff of the PBOC and of other government institutions to stay home and avoid certain activities, “which weighs on the development process.”

This was further confirmed by Shentu Qingchun, CEO of Shenzhen-based blockchain company BankLedger, a company that The Global Times claims is involved in the launch of DCEP. Shentu purportedly said while the PBOC intended to make an announcement regarding the digital currency in Q1 2020, the chances the “announcement could be made on time are slim.”

Those interviewed by the outlet remain largely optimistic, however, affirming their support for the project and suggesting that the launch of the digital currency is likely still on track to take place sometime this year.

Other Effects Are Being Felt

The coronavirus outbreak has been affecting the cryptocurrency and blockchain space in other ways.

Over the past few weeks, even as BTC’s price has shot higher from the $6,400 December bottom, the hash rate of the Bitcoin network has stagnated around 110 exahashes per second. While this metric is still nearly triple that seen one year ago, the stagnation began when the coronavirus began hitting mainstream media headlines in the West, around the start of January.

This suggests the coronavirus is slowing the efforts of Bitcoin miners to expand their operations; indeed, as explained in a previous Blockonomi report, Jiang Zhuoer of BTC.Top revealed that the police had shut down his mine due to the coronavirus.

Also, crypto conferences have been delayed, as have conferences in the traditional tech world. Most notably, Token2049 — a Hong Kong conference that this writer intended on attending this March — was pushed until October.

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Bank of Japan Deputy Governor Amamiya: Cheaper CBDCs could stifle private sector innovation

  • BoJ deputy governor foresees CBDCs affecting countries’ financial intermediation due to a shift in funds.
  • Central banks have to learn the pros and cons of CBDCs and seek ways to mitigate the risks.

The deputy governor of the Bank of Japan (BoJ) Amamiya in recent remarks says that central banks are bound to remain lenders of some kind even at the time when digital currencies are issued. Therefore, there is a need to carry out a monetary policy through the control of digital money flows.

Amamiya believes that central banks considering issuing their own digital currencies around the world should “conduct a comprehensive study on how it affects the country’s settlement and financial systems.” The deputy governor also warned against issuing cheaper central bank digital currencies (CBDCs), which is likely to stifle innovation in the private sector.

Moreover, if we reach a point where households and businesses start to prefer CBDCs over bank deposits then that could affect countries’ financial intermediation through shift in funds. Lastly, Amamiya said that central banks must seek to learn the pros and cons of CBDCs and explore ways on how to mitigate the risks.

News:source

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