The deputy governor of Japan’s central bank says that the bank must be ready to launch a central bank digital currency when the need arises. According to him, given the growing technological innovation in the sector, the need for a digital currency might soon arise in the country.
He believes that the demand for a central bank digital currency in the nation could rise soon. He made the remarks during an interview with Reuters. In his opinion, such issuance would depend on how the global payments system develops in the future, which could increase the need for a CBDC in the nation. Japan is not the only nation that is seeking to launch a CBDC. China, a major economy in the region, is at the forefront of launch a digital currency dubbed the DCEP. This launch could happen sometime this year.
Another nation that is well on its way to launching a digital currency is Cambodia. The nation plans to launch a central bank digital currency this year, according to the director-general of the nation’s central bank. He believes that the launch will happen in Q1 this year. The director-general said that the currency would serve as the nation payment gateway for Cambodia.
China Might Be the Cause
China and Japan are the two largest economies in the S.E. Asia region. The launch of China’s digital currency has no doubt set off alarms amongst regulators in Japan. If they find that it offers China a competitive edge in the financial world, Japan might have to launch a digital currency to stay competitive. While China has claimed its digital currency will only be used domestically, its reach will likely extend throughout the region.
Many nations in the region might decide to launch a digital currency as ell to avoid competition from China’s digital currency and to maintain control over their monetary policy. It is worth noting that many nations in the region have already embraced crypto and blockchain technology.