Japan Uneased by Chinese CBDC, Plans on Digital Yen in ‘2 to 3’ Years February 15, 2020 65 Views China continues to pull ahead in the central bank digital currency race as more details on its secretive digital yuan project intermittently surface. The general idea is to counter the soon-to-be-released digital yuan from neighbouring China and prevent it from disrupting the global economy. […] Specifically, Amamiya argued that issuing a CBDC for general use would undermine the existing financial system, as that would allow consumers to open accounts directly at the central bank and hence abandon private banks altogether, putting them at a major disadvantage: “The issuance of central bank digital currencies for general use could be analogous to allowing households and firms to directly have accounts in the central bank. This may have a large impact on the aforementioned two-tiered currency system and private banks’ financial intermediation.” […] He added that Japan should take in the technical and financial consideration into account, elaborating: “Technically, Japan’s CBDC would be a great tentpole for digital transformation and innovation for all Japanese financial services firms and a way for them to piggyback on the Bank of Japan’s digital currency to push their own product development. Financially, a CBDC could be a huge money saver for banks as well as an effective tool to protect against tax evasion and money laundering.” Both experts agree that albeit the People’s Bank of China is considered the frontrunner in the CBDC race, it is not too late for the Japanese central bank to start its own digital currency project, as two to three years in global financial market terms is still quite fast.
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