Japan rushes digital yen plans to compete with China

As Bitcoin and altcoins expand worldwide, banks and governments are searching for ways to compete frantically. CoinFi reports that Japan’s central bank has been working on a CBDC (Central Bank Digital Currency) since April this year. Now, it’s accelerating its plans to make the digital yen a reality.

Numerous central banks around the world are working on different CBDC initiatives. Banks and policymakers have been discussing Central Bank Digital Currencies more and more often. They are frequently the subject of heated debate.

Japan in cutthroat competition with other countries

According to the first ever- minister of economic security in Japan Takayuki Kobayashi, the country will be accelerating the project to start issuing the digital yen. Other countries rushing plans to release their own CBDCs is one of the reasons for this decision. One such country is China, whose CBDC is already in its advanced development stages.

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If Japan proves unprepared to release its digital currency, this could be a threat to it. If everything goes as planned, China might release its CBDC as soon as next year. Overall, Japan is considering the other Asian giant’s geopolitical role and the effects that a digital CNY could have on the economy.

Andrew Sullivan, founder of AsianMarketSense.com, commented China’s ambitions to release a CBDC in this connection. He stated, quoted by CoinFi:

Whichever country comes up with a good digital currency first, that’s likely to be copied. And so it’s rather like, you’re setting out the ground rules for how these are going to work, going forward.

Other experts concur that the first central-bank issued digital currency will probably be copied by other countries, leading to a standard enforced by the creator of the most successful CBDC. Of course, there could be many different ways on how to release a CBDC. Time will tell the best one.

China uses personal data to its advantage

Japan and many other countries don’t perceive collecting data from citizens as something good, whereas China collects as much as possible. What’s more, China is fighting a currency war against the United States dollar in the region. Its objective is to reduce dollar dominance by taking markets away from it.

Japan’s alliance with the US might be at risk if the former fails to launch a CBDC speedily. Both Japan and the United States face damages if the USD loses its status as a reserve currency.