A senior official at the Bank of Japan (BOJ) recently issued a warning about the general framework for digital currencies. The view makes clear that since the current rules do not mention the possibility of using digital assets to avoid sanctions, G7 countries need to come up with a common rule to recalibrate as quickly as possible.
| The G7 is an intergovernmental political forum that includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. |
The statement was issued in response to the ongoing conflict between Russia and Ukraine, as cryptocurrencies and their potential applications have the potential to swing economic sanctions. They are being monitored more and more.
The head of the BOJ's payment systems division, Kazushige Kamiyama, said the use of stablecoins makes it easy to "create an individual global payment system," making it easier for countries to evade traditional and regulated payment systems where U.S. dollars are used, Euro or yen to pay.
Kamiyama added that G7 countries should be aware of the urgency of this if they want to coordinate effectively in regulating cryptocurrencies and digital assets. In addition, this regulatory framework will affect the process of designing the digital currency of the Central Bank of Japan (CBDC) – the digital yen. Therefore, it is necessary to carefully consider the balance between personal privacy and concerns about money laundering and other "white-collar" crimes.
The BOJ governor, Haruhiko Kuroda, announced at Japan's FIN/SUM Fintech summit on March 29 that they "have no plans for an introduction to CBDCs anytime soon." The BOJ also plans to carefully consider the expected role of central bank money in the lives of Japanese citizens that needs to be adopted. .
"We believe it is important to be prepared to respond thoroughly to changes in circumstances appropriately to ensure the stability and efficiency of the overall payment/settlement system."
Kuroda's comments come just four days after the BOJ announced that it is moving on to phase 2 of testing the viability of the Japanese CBDC. Phase two will begin this month, so any new regulations decided by the G7 group of nations will have some impact on the process.
Kuroda said that a decision on whether to enact CBDCs in Japan will most likely be made around 2026, depending on the speed at which CBDC is applied worldwide.
