A group of about 70 lawmakers from Japan’s ruling Liberal Democratic Party, which has been working on proposals to issue digital currency, is set to release details tomorrow.
Norihiro Nakayama, a member of the party and vice minister for foreign affairs, told Bloomberg on Thursday that Japan needs support from the U.S. Federal Reserve to check the potential influence of China’s planned digital yuan.
“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,” said Nakayama.
He added that China’s digital currency has a “high” chance of becoming the “standard” within the country’s one-belt-one-road digital economy initiative.
Japanese lawmakers' efforts were first revealed late last month. At the time, Nakayama said: “China is moving toward issuing digital yuan, so we’d like to propose measures to counter such attempts."
Just yesterday, Federal Reserve governor Lael Brainard also said the U.S. central bank is studying the feasibility of issuing its own digital currency. “Given the dollar’s important role, it is essential that we remain on the frontier of research and policy development regarding” central bank digital currencies, Brainard said.