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Japanese lawmakers are pushing for the adoption of the new CBDC system and the development of the digital yen in the next three years in order to counter the failing fiat currency system.
Led by the head of the Banking and Finance Systems Research Commission at the JLD party Kozo Yakamoto, Japanese lawmakers are pushing for the country to digitize their systems by adopting CBDC. According to Yakamoto, the country should be in the line of creating a Yen Central Bank Digital Currency in the next three years.
Furthermore, in order for the world economy to avoid the risk of economic crisis, a digital currency back -up that is controlled by the central bank is highly needed. In his words, Yakamoto said:
“The sooner the better. We’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years. […] 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.”
Otherwise, he is not the first lawmaker to introduce such a policy to the government, as the former economy minister, Akira Amari, pushed the idea of introducing the CBDC. This was in order to counter the deflating fiat system and also compete with the Chinese digital yuan. This is after China has successfully completed the design and testing of the digital yuan
Japan’s lawmakers have been publicly cited calling for their government to introduce digital currencies as an agenda in the coming G7’s meeting. It is a call after the global market has been leaning on cryptocurrencies to trade online with huge companies accepting the new world order.
Is Japan Ready for CBDC?
Analyzing different aspect of Japan’s economy, it would give a clear insight as to why the lawmakers are pushing for the country to adopt central bank-backed digital currency. With the country being a major manufacturing and technological hub in the world, it is in line to evolve with the current technology. Otherwise, it risks running on obsolete systems that cannot compete with other huge world economies like China.
Checking on the export-import ratio of the country, at the end of December 2019, export from Japan drastically fell with 6.3% compared to the previous year. This made the 13th consecutive month of the export declining, which reciprocate to a declining state of the economy.
With all these factors placed into one basket, it is clearly indicating the country needs a support digital currency to avoid a state of economic crisis. If implemented, Japan will be joining other world central banks in working to deploy a central bank-backed digital currency.