In a move that signals Tokyo’s concern regarding China’s effort to make a digital yuan, as well as Facebook’s Libra, a collection of ruling party legislators is crafting a proposal for Japan to create its own cryptocurrency. However, Japan is not likely to issue crypto in the near future because of the legal and technical obstacles, Reuters reported.
The move comes after a Bank of Japan decision to join with six other central banks to share knowledge on issuing digital currencies at a later time. Prime Minister Shinzo Abe told Parliament that the government would work with the bank in examining cryptocurrencies and finding ways to bolster the convenience of the yen as a means of settlement.
The crypto could be a joint effort between private firms and the government, which would help Japan tap into worldwide shifts in financial technology, as the Parliamentary Vice Minister for Foreign Affairs Norihiro Nakayama told Reuters.
“The first step would be to look into the idea of issuing a digital yen,” Nakayama said. “China is moving toward issuing digital yuan, so we’d like to propose measures to counter such attempts.”
The group – which is headed up by Akira Amari, the former economy minister – plans to present its proposal to the government as soon as February.
The news comes after it was reported that the People’s Bank of China (PBOC), the central bank of China, said it had completed the “top-level” design of its proposed cryptocurrency. The PBOC made the information known in a recently released paper, noting that the “top-level design, standard formulation, functional research and development” of the digital yuan coin has been finished.
Mu Changchun, the head of the digital currency research institute at the PBOC, said the focus will be on “stability, security and control.” The bank recently said the currency was “progressing smoothly,” per past reports.