Japan lawmakers toy with the idea of creating a digital yen

Japanese politicians seem to be worried about China's drive to create digital yuan and private initiatives such as Facebook's Libra. A group of lawmakers from a ruling party considers the issuance of its own digital currency backed by yen. They prepare a proposal on this initiative that may involve cooperation between governmental agencies and private companies, Norihiro Nakayama, parliamentary vice-minister for foreign affairs, explained in the interview with Reuters.

“The first step would be to look into the idea of issuing a digital yen. China is moving toward issuing digital yuan, so we’d like to propose measures to counter such attempts,” Nakayama said on Thursday.

Some Japanese lawmakers have already expressed concern over Beijing’s attempts to strengthen yuan's role as a settlement currency in emerging economies. Thus, the finance minister Taro Aso said that digital yuan would create serious problems if it gains popularity as a means for international settlements as Japan settles transactions mostly in dollars.

Akira Amari, a former economy minister heads the group that may submit the proposal to the parliament as early as in February.

Notably, earlier this week, Bank of Japan joined the group of other global central banks to work together on the issues related to Central Bank Issued Digital Currencies (CBDC) and share experience in this domain. Moreover, Prime Minister Shinzo Abe told parliament on Friday that the government would cooperate with Bank of Japan in studying digital currencies and finding ways to make en more convenient as a means of payment.