While the Central Bank Digital Currency (CBDC) project by the central bank of Japan started as an experiment in April, it has been quite modest so far. Being an experiment, there is no specific timeline to its public issuance.
The first-ever minister of economic security of Japan, Takayuki Kobayashi asserted recently, that it is now time for Japan to speed up the digital yen project and make plans to release it anytime. He also suggested that speeding up the project is a matter of national security as the country should not be behind while others are launching their CBDCs.
Recent reports have shown the giant steps taken by China to ensure its digital yuan is ready for issuance. The country has completed its pilot tests in more than 10 cities and has affirmed that the e-CNY is ready for issuance as planned in the 2022 Beijing Olympics in February.
Speaking with a local media, the CEO of SBI Holdings in Japan, Yoshitaka Kitao, opined that the most advanced country currently in financial technology especially as it has to do with CBDC is China while Europe and the United States are following them.
The ambitions of China for its e-CNY project have some geographical implications. The founder of Asianmarketsense.com, Andrew Sullivan, put it in perspective when he said the country that gets its digital currency up and running first with a good framework will likely be copied and will be the pacesetter going forward.
In addition, Andrew Sullivan believes China is working on bringing the entire Asia region under its e-CNY project. He said, “The more China work to push the US Dollar out of the Asian continent, the more they are establishing Renminbi as the Asian currency.” He believes having the e-CNY in the Asian market will hand the control of finances of the system to China.
In all, the economic alliance between the United States and Japan might be a threat to the reigns of the digital yuan in the Asian market.
An unnamed official under Fumio Kishida, the new prime minister of Japan, when speaking with a media outlet said the country needs to collaborate with the United States to tackle any attempt to take over the status of the US Dollar as the reserve currency and that the central bank of Japan is working round-the-clock to speed up the issuance of its digital yen. The operatives around the technical and legal aspects of the issuance have been increased.
The new prime minister administration who assumes office in October has cited economic security as one of its top agendas and since China will launch its e-CNY soon, Japan also will make its digital yen project a priority.