Japan could soon release its proposal to create a central bank digital currency (CBDC) or national cryptocurrency. The main goal would be for the country to be able to effectively compete against Facebook’s Libra and a possible Chinese digital yuan. 

Japanese Experts Work on CBDC Proposal

A few weeks ago, we reported at UseTheBitcoin that there were some Japanese lawmakers that were working in order to create a proposal to release a CBDC. At that time, Reuters explained that the lawmakers of the ruling party were thinking about this possibility so as to remain competitive in a world of new digital currencies. 

Facebook, the largest social media in the world, announced in June 2019 that they were going to be releasing a virtual currency called Libra. Although it has not yet been released, there is a lot of speculation around it. Indeed, digital assets became used in a large number of industries, including such as gambling sites or finance, among others. 

Meanwhile, countries such a China are really thinking about issuing their local virtual currency. This would help them increase their monetary policy efficiency and also have wider control over the population. Nonetheless, some of the proposals made by some countries make reference to CBDCs that are only going to be used by financial institutions. 

Japan has been one of the most important countries for virtual currencies in the last years. It has helped companies find a clear regulatory environment where to operate and has also allowed investors to feel protected while using virtual currencies. 

According to Norihiro Nakayama, a senior lawmaker of the ruling party, the proposal they are working on will help the country embrace a new digital currency. Nonetheless, there are many technical issues besides the legal ones that would make the whole process very slow before we finally see a local CBDC being launched. 

In addition to it, Nakayama mentioned that they are working side by side with the United States in order to counter China’s efforts to challenge the existing reserve currency and international settlement system. 

On the matter, he said:

“We sense the digital yuan is a challenge to the existing global reserve currency system and currency hegemony. Without the U.S., we cannot counter China’s efforts to challenge the existing reserve currency and international settlement system.”

Nowadays, cryptocurrencies are expanding and entering a new bull market. This could be a very good year for virtual currencies considering that Bitcoin will be halving in the near future.