Japanese Foreign Minister Appeals to the U.S. to Join CBDC Research Coalition 

Japan is beginning to make moves into the digital currency space, with the country’s finance policymakers working earnestly to get a proposal ready soon enough. However, the Asian giant is also looking to fend off threats from a similar project from China. 

According to a recent report from Bloomberg, Norihiro Nakayama, the Vice-Minister for Foreign Affairs in Japan is working to court assistance from the United States in its bid to reduce the effects of the Chinese digital asset. 

Collaborating to Curtail China’s Influence 

Speaking as the country’s top financial minds put the finishing touches to the government’s proposed digital asset proposal, Nakayama reportedly explained that he would like for the United States Federal Reserve to join the coalition of central banking institutions working towards launching a digital asset. 

The coalition itself involves central banks from Canada, the United Kingdom, Japan, the European Union, Sweden, and Switzerland. In a press release published by the Bank of England last month, the institution explained that this consortium would be working with the Bank of International Settlements (BIS) and sharing valuable experience in their bid to study the potential effects of Central Bank Digital Currencies. 

It’s no news that Japan is working on a cryptocurrency. Lawmakers from the ruling party started work on a digital Yen in response to growing concerns over the effects of China’s planned digital asset on Japan. The proposal for the planned asset that is set to be launched on Friday was worked on by 70 Liberal Democratic Party lawmakers, and it reportedly shows an asset that will be developed by both the government and representatives from Japan’s digital financial sector.  

However, as Bloomberg noted, the Japanese Foreign Minister will very much like for the United States to be involved as well.

“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, who also helped to draft the current proposals. 

The U.S. Continues to Mull the Subject 

Nakayama explained that due to China’s population, the digital yuan has a prospect of seeing massive adoption even in its early stages, thus becoming the standard for currencies on the global digital framework. Since the Dollar is the world’s reserve currency and the United States remains the global superpower, there’s no reason for the country not to be involved, as he explained. 

Whether or not Nakayama’s appeals were heard remains to be seen, but it would seem as though the Fed is indeed working on developing its own digital asset. 

Talk of Uncle Sam creating a digital version of the greenback has been around for a while now, but not much has been done with regards to that. However, Lael Brainard, a member of the Fed’s board of directors, spoke at a conference on the future of payments at the Stanford Graduate School of Business yesterday. There, she confirmed that the Fed has been “conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC (central bank digital currency).”