Countries like Tunisia, Venezuela, Senegal, China, and many others have launched their own digital currencies not because they want to compete against their national government-backed currencies, but because they perceive cryptocurrencies as technological breakthroughs. Japan is all set to join this list of countries that are inclined towards launching its own Yen digital currency. A senior lawmaker from the ruling party in Japan made this announcement on Monday, that Japan will be launching its own digital currency in the next 2 to 3 years.
The onus of adopting cryptocurrencies lies in the fact to make the countries go cashless. Not only do cryptocurrencies facilitate easier online transactions but it also helps in currency exchanges with international countries. It also helps in reducing the national debt of the countries. Apart from these reasons, there are 2 other important factors that contributed to Japan’s taking this decision of creating its own digital currency.
Firstly, the decision of Facebook to launch its own cryptocurrency named Libra has pushed several other countries to think for crypto adoptions, and launching of own digital currencies, instead of relying on the nation-states to control money in the years to come. Secondly, China’s move towards launching its own digital currency also prompted the Japanese lawmakers to think over the crypto adoption and include plans for creating own digital currency in the government’s mid-year policy. Central banks all over the world are looking forward to issuing central bank digital currencies (CBDCs), and China being at the front seat to launch its own digitized money.
Talking about the benefits that the digital currency can bring in the nation’s economic development, Kozo Yamamoto, the finance head of the Liberal Democratic Party (LDP) remarked,
The sooner the better. We’ll draft proposals to be included in government’s policy guidelines, and hopefully, make it happen in two-to-three years. The spread of digital currencies may undermine the dollar’s supremacy, but it could help stabilize emerging markets such as Cambodia, which heavily relies on the dollar. If each country manages to control flows of money with their own (digital) currencies, that could prevent a big swing at a time of crisis and stabilize their own economy.
