Paul Schulte, Advisor, Banking and Financial Services
August 22nd, 2019
Paul Schulte is the Founder and Managing Editor of Shulte Research based in Singapore. Paul's roles[...]
Stunning Japanese Admission About China May Foreshadow Digital Currency Breakthrough
Forbes | Steven Ehrlich | Jan 27 2020
There are at least 18 central banks developing a form of sovereign digital currency, according to a recent survey from crypto news outlet The Block. Some such as China see the efforts as a way to reduce fraud, increase financial transparency, and support flagging economic growth. Others like Iran and Venezuela are looking for ways to evade global sanctions. Finally, tinkerers such as the European Central Bank are making somewhat symbolic efforts as a hedge against Libra, to placate impatient innovators, and use them as an opportunity to learn.
See: Central Bank Digital Currency and Fintech in Asia
For this latter group, it would be great if something beneficial comes out of this experimentation, but there is no real sense of urgency.
The same cannot be said about Japan, where senior leaders took the extraordinary step of not only reversing recent guidance from the Japanese Central Bank saying that they weren’t pursuing a form of digital currency, but admitted that a primary reason for doing so was concern about what may happen if China’s far more advanced efforts succeed.
Drawing a Line in the Sand
Consider these recent statements.
This week Norihiro Nakayama, Japanese Parliamentary Vice Minister for Foreign Affairs, told Reuters, “China is moving toward issuing digital yuan, so we’d like to propose measures to counter such attempts.” Not to be outdone, earlier this month former Prime Minister and Current Finance Minister Taro Aso said that it would be a “very serious problem” if digital yuan becomes a popular means for international settlement.
See:
-
Japan ruling party lawmakers to float idea of issuing digital currency
-
10 ways regulators need to change in 2020
-
Three Big Things: The Most Important Forces Shaping the World
Best of Enemies
There are geopolitical and economic reasons why China’s attempts to corner the market on CBDCs are seen as an existential threat in Japan. First, for as technologically advanced as Japan’s economy has become, it is highly reliant on global supply chains and vulnerable to trade tensions, such as the recent hostilities between the U.S. and China. Additionally, it has extremely limited fossil fuel deposits and must import most of these precious resources from precarious regions in their own right. As an example, 80% of its oil comes from the Middle East.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
   |
Related Posts
Facebook Weighs Libra Revamp to Address Regulatory Concerns
RBA says it’s ready to regulate Facebook’s Libra
US Fed Chair Says Private Entities Should Not Help Design Central Bank Digital Currencies
Visa’s digital dollar concept opens a door to central bank currencies
Bank of Canada Speech: Money and Payments in the Digital Age
China’s digital currency app looks like Alipay and WeChat Pay
