(Rejected 2) Japanese Lawmakers Push U.S to Include Digital Currencies on G7 Agenda in June
According to a Reuters report, Japan lawmakers are calling on G-7 members to collaborate on digital currency research as a strategic approach to respond to China’s planned digital yuan. Japan is feeling the pressure of China’s progress towards launching digital yuan.
Japan’s top lawmakers are calling the government of Japan to push for digital currencies to be placed on the G7 summit’s agenda in June 2020. In other words, these leaders are suggesting that the Japanese government should ask the U.S (the leader of the summit) to include digital currencies on the agenda.
The Race for Digital Currency Supremacy
Despite Japan’s ongoing effort to issue its digital currency, Akira Amari, former economy minister, stated that it is necessary to encourage the U.S to focus on the topic. Akira suggested that Japan should work together with the United States and make digital currency the G7 agenda.
The Reuters report that Japan’s top lawmakers led by Akira Amari are concerned with China’s development of its CBDC (central bank-issued digital currency) and launching of digital yuan.
Amari said:
“We live in a stable world led by multibillion-dollar settlement. How should we respond in case such a foundation collapses and if China’s strident move gives rise to a struggle for currency supremacy?”
Amari further stated:
“Japan should collaborate closely with the United States. As part of such efforts, we need to ask the U.S to set the digital currency on the G7 agenda.”
Amari concerns that the prospect of China’s digital yuan could challenge the U.S dollar’s global hegemony.
Japan heavily relies on the dollar-denominated settlement system, which allows its businesses and banks to transact all around the world. Other key Japan’s lawmakers agree with Amari’s concerns, considering that China’s digital yuan may see high adoption among emerging countries in particular. The Japanese economy could experience significant disruption should developing countries start using the digital yuan instead of the U.S dollar currency.
The top Japanese lawmakers urged Japan should prepare to issue its own digital yen. This comes to light as China works on launching its digital yuan, which may pose a threat to the U.S dollar dominance as the global reserve currency. The U.S is yet to take remarkable steps to join the race.
The United States is still discussing central bank digital currencies. The U.S federal reserve officials are still conducting experimentation and research to properly evaluate benefits and risk of digital currencies. However, fed reserve officials have concerns by private initiatives such as Libra and the impacts they could create to the global financial system.
In the previous month, the Central Bank Of Japan established a working group with other five other central banks, including the EU, and the U.K, to share and coordinate research into digital currencies. The group will have its first meeting in Washington, D.C, during the IMF (International Monetary Fund) conference in mid-April.