A Closer Look at the Bank of Japan's Digital Yen Approach

Central bank, digital currencies are becoming increasingly controversial, at least in the US. So where several presidential candidates taking strong stances stances against them. And meanwhile, in the rest of the world, 100 and 30 countries are exploring the CBD C. According to the Atlantic Council, Emily, you've been tracking what's happening across the world in Japan. It's the world's third largest economy. Does Japan have any plans to issue a digital Yen? So Japan has no official plans to issue a digital yen. The Bank of Japan has said that they very clearly that they don't have a specific plan to do this. However, they are still further along than say the United States, for example, because Japan has been conducting sort of proof of concept pilots, technical tests. So basically their stance is that they have no official plans as of now, but they need to be thoroughly prepared in case one day they do decide to issue a digital yen. Do we know if there's actual demand for it? I mean we don't see any real Japanese Yen stable coin. So uh do do do do people need this? Yeah, great question. So there's actually two questions on that question. So the first is their actual demand that no, I don't think, I don't think there's demand for it in Japan right now. I think that Japan's position is that there's no demand for it right now, but they need to be prepared in case there is demand in the future. And I think according to their definition, what demand in the future would look like is if for some reason, cash would become less prominent in Japan, Japan is kind of interesting because it does actually have a lot of digital means of payment, but it also is a very cash heavy society. So I think the idea is that like as long as cash is around, it's fine. But you know, if cash diminishes, then they would consider issuing something like a digital Ya. As for the stable coin question, stable coins have been effective, had been effectively banned in Japan until very recently. It's basically just June of this year that stable coins are now allowed back in are allowed in Japan for the first time. So I think that's gonna be an interesting uh shift in the Japanese crypto world. And how does it compare to the rest of the world where other CBD C projects are ongoing? How does Japan differentiate itself? I think that I would just say that the Japanese conversation about the digital end is fairly calm and measured. It's not like in the US where it's there's there's, there's a lot of panic about it and people are talking about it as a tool of surveillance and states are talking about banning it. So, in Japan it's a little bit, I would, I would put it this way. There's not, there's not a lot of strong support for it and there's not a lot of strong opposition for it. They're just kind of trying to be thoroughly prepared testing it. I think they do, they are emphasizing privacy. They've emphasized that if there were to be a digital yen, it would be intermediate, it would be directly from the central bank. So I'd say it's a fairly calm conversation about the digital Yen in Japan. You know, the other thing is that uh we've actually seen how Japan's way of going about the digital yen is slightly different from some of the other parts of the world where they've almost publicly acknowledged uh a very public government facing and private partnership uh where, you know, these private companies are kind of helping the government almost openly, which is not really happening in other parts of the country. Can you shine more light on that? Yeah, I mean, I, so I wouldn't say that Japan has never done any partnerships, but, you know, I think, yeah, it's, it's, it's definitely like a little bit of a quieter initiative than we've seen in other parts of the world. Like, you know, China, for example, that is very advanced and even Europe, we're seeing, you know, Europe will probably move more rapidly in, in this area.