In 2022, Japanese financial institutions expect a clearer view of the digital yen‘s development and future use.
Japan will be able to construct a clear action plan to build its stablecoin no later than the end of 2022, according to Hideki Murai, the leader of the Liberal Democratic Party. He stated that the Bank of Japan is actively investigating the key functions of the yen’s digital embodiment. First and foremost, the department seeks to identify firms that can operate as intermediaries between the country’s central bank and potential national token holders.
Murai also predicted that the CBDC project would elicit a heated debate regarding the stablecoin’s potential influence on the country’s existing financial infrastructure. At the same time, the politician is certain that if commercial banks become the leading agents for the digital yen, an innovative asset can drastically revolutionize the Japanese financial industry.
He also brought up competition in the construction of a stablecoin with China, which has been testing the digital yuan for some time. Murai stated that the yen-yuan relationship would fundamentally shift if the latter attract sufficient attention from visitors and traders due to its convenience. Most likely, it was about the upcoming Olympic Games in Beijing in 2022, during which visitors to the Chinese capital will be able to pay for various goods and services using digital yuan.
In terms of the role of the world reserve currency, Japan does not regard the digital yuan as a direct competitor to the dollar today. However, the country keeps its finger on the pulse, intending to stay up with its counterparts in developing a national cryptocurrency in the face of other central banks.