Influential lawmakers in Japan’s ruling party are concerned about China’s plan to launch a sovereign digital currency, and have called on the nation to prepare to issue its own in response.
A test of the financial system’s foundation: According to Reuters, some Japanese lawmakers think that China’s planned digital renminbi, which it has said is “close” to launching, could find widespread adoption in emerging economies and threaten the US dollar’s role as the global reserve currency. “We live in a stable world led by dollar settlement,” Akira Amari, an influential lawmaker in the Liberal Democratic Party, said last week in a meeting to finalize the group’s proposal. “How should we respond if such a foundation collapses and if [China’s move] gives rise to a struggle for currency supremacy?”
A digital yen? To keep up, Japan should aim to create a digital yen “within two to three years,” Kozo Yamamoto, another senior member of the party who heads its research commission on finance and banking systems, told Reuters. “The sooner the better.”
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