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Japan puts digital currencies on policy road map

24 Comments
By Tetsushi Kajimoto and Daniel Leussink

Japan will look closer into whether to issue central bank digital currencies (CBDCs), the government said in its annual policy road map, a sign that Tokyo may be warming to the idea as the coronavirus heightens demand for cashless payments.

In its first-ever reference to digital currency in the annual plan, the government urged the Bank of Japan (BOJ) to liaise with other countries to jointly examine its feasibility.

"The BOJ will coordinate with other countries to consider CBDCs by examining and verifying technological tests," according to the document, which serves as guidance for the government's long-term economic and fiscal policies.

Facebook's efforts to launch its Libra cryptocurrency stablecoin have forced central banks to look more seriously into issuing their own digital currencies.

China has been among countries leading in the drive toward issuing CBDCs, prompting some Japanese ruling party lawmakers to urge Tokyo to catch up.

However, the government and the BOJ have been cautious about moving too quickly given the legal barriers and social disruptions it may cause in a country that has the most cash-loving population in the world.

Still, the pandemic may add momentum to calls for Japan to look into CBDCs more seriously, if more people avoid handling hard cash, and to move towards digital settlement, analysts say.

While the BOJ has said it has no immediate plans to issue a digital currency, it is conducting research with other central banks on the issue.

As part of a wider move to boost digital payment systems, the government is seeking a cut in interbank transfer fees. It will review the fees, which have been unchanged for more than four decades, by the current fiscal year end next March, a government official said.

The issue was included in this year's economic growth strategy that was approved by the cabinet alongside the annual policy plan on Friday.

In the growth strategy, the government said it would make it easier for working people to take on multiple jobs and that it would come up with new rules for freelance work.

© Thomson Reuters 2020.

©2020 GPlusMedia Inc.

24 Comments
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They might issue digital currencies, or not.

Hope they will. It would make Japan more attractive to the digital nomads.

-7 ( +0 / -7 )

Just another fiat currency of dubious value for governments and central banks to manipulate. Bitcoin terrifies them because it’s outside their control and difficult to tax and for their cronies in the banks to charge fees on.

While the push towards toward going cashless has been on for quite a few years now, it’s currently in overdrive due to propaganda that cash is dirty and dangerous, switching gears from the cool and convenient mantra up to recent months.

I guess if you don’t mind banks being able to charge a fee for every transaction as an intermediary, or governments being able to tax every exchange between individuals (prospectively, even when giving your kids ¥1000 or lending some money to a friend), then a cashless society won’t bother you. And you’ll be safe in the knowledge that your government loves you.

4 ( +5 / -1 )

I guess if you don’t mind banks being able to charge a fee for every transaction as an intermediary, or governments being able to tax every exchange between individuals (prospectively, even when giving your kids ¥1000 or lending some money to a friend), then a cashless society won’t bother you. And you’ll be safe in the knowledge that your government loves you.

You still have to pay a fee with bitcoin transactions. It goes to the miners, providing the incentive for them to dedicate resources to mining.

2 ( +2 / -0 )

I like cash. Cashless is nice too but sometimes cash is better.

6 ( +6 / -0 )

You still have to pay a fee with bitcoin transactions. It goes to the miners, providing the incentive for them to dedicate resources to mining.

I know, but it’s not going to a government or bank, and it’s really the choice of the individual whether the even use Bitcoin in the first place.

But for the foreseeable future, the vast majority of people will only be using the currency of the place where they are at the time. With cash, there’s still the liberty of anonymity and the freedom to exchange money with whoever you wish without undue outside interference and unjustified charges. If we go cashless, that disappears. And there’s also the risk of being basically “unpersoned” by freezing your bank account if someone in authority doesn’t like the way you think, because then you won’t be able to buy or sell if physical money no longer exists.

0 ( +2 / -2 )

Call me old fashioned, traditional or whatever but I prefer cash vs electronic payment. Besides when the power goes out all that high end fancy smart phone does no one any good, despite high end top of the line models, you need power else it is yes, cash. no money no product. If one doesn't pay the bill, the high end top of the line Samsung Android or Apple X12 is no good and becomes as useful as a paper weight.

4 ( +4 / -0 )

Going digital is fine but you should consider security before convenience. If North Korea explodes one of its nukes in the stratosphere over Tokyo, the electromagnetic pulses from the explosion could destroy electronics devices. All the ATMs, PCs, smart phones, automatic ticket gates at train stations would cease to function.

2 ( +2 / -0 )

I'm all for the convenience of a digital currency, but as kyronstavic has pointed out above, it gives a huge amount of power to the central bank / government. They will be able to give and take as they see fit. It's beginning to feel a lot like 1984.

2 ( +3 / -1 )

Prepaid cards are as good as digital currency but governments prefer digital currency so that they can have absolute control of your money. The Japanese government sees going digital as a means of picking the pockets of citizens.

Always carry cash and use it, it will save you big bucks. If you go out for a few drinks or to buy a 6000 yen pair of shoes, your spending limit is how much cash you have. If you go shopping for a 6000 yen pair of shoes and are paying with a card, it is so easy ending up buying a pair of 8000 yen shoes and a new belt you really did not need or want.

2 ( +2 / -0 )

fake money is illegal . virtual is not real. you turn off electricity and bye bye !

2 ( +2 / -0 )

Funny, I remember when a month ago I mention that cryptocurrencies in general are our future and everyone downvoted me, but the truth is that some kind of crypto currency is our future. So better for NAY sayers is to get on that train before it will leave so you can make some profit. For a very long time governments were saying that there is no way to implement digital currencies, but silently they work to develop this system.

I know most of the people will say "Ohh here in Japan we have earthquakes, it's impossible to have only digital money" but if you actually think about it even if you have an earthquake, satellites connection are in use, and you can still transmit the data. Beside you can implement a chip into the human body i.e. hand that will record how much money you have in your account, so even without the electricity with poor satellite connection or without it you will be able to buy goods.

Unfortunately, I believe that in Japan we will have Chips implemented to the human body as the society is ageing and many of grandma&grandpa doesn't know how to use computers, credit cards, internet etc. so that will be the most convenient way for the government.

-1 ( +0 / -1 )

@

Larr FlintToday  12:29 pm JST

Funny, I remember when a month ago I mention that cryptocurrencies in general are our future and everyone downvoted me, but the truth is that some kind of crypto currency is our future. So better for NAY sayers is to get on that train before it will leave so you can make some profit. 

I'm ok with not getting on this train, besides, many of the original tribes lived for thousands of years without electricity, trains, trains, phones, they definitely had capability to create, but chose not too. Made sense because all in the name of profit, greed and convenience came family, tradition and honor. Things lost along the way.

2 ( +2 / -0 )

Given the past issues the government and Japanese companies have experienced with inadequate online security in a variety of spheres, and the far greater sophistication of their Asian political adversaries in exploiting them, I'd be hesitant to invest in any cybercurrency housed here. It's gonna have a huge target painted on it that the Russians, Chinese and North Koreans are not going to miss.

1 ( +1 / -0 )

I'm all for digital currencies. Just not the kind controlled by central banks / government.

2 ( +2 / -0 )

And for all those saying that crypto is dangerous because of earthquakes / Nuclear War / EMP and generally the power grid going down for whatever reason, the money doesn't disappear in these circumstances. It just becomes temporarily difficult to access. Once the grid is back up, your asset will still be just as you left it. In the event of nuclear war or EMP taking down the power grid, you've got bigger problems to worry about than your savings... who's to sat fiat paper "money" will be worth anything in that scenario?

0 ( +1 / -1 )

I'm all for digital currencies. Just not the kind controlled by central banks / government.

Totally agree, I'm in as well, although they won't allow.

I'm ok with not getting on this train, besides, many of the original tribes lived for thousands of years without electricity, trains, trains, phones, they definitely had capability to create, but chose not too. 

I think you are in a wrong country if you believe in that. Besides, many tribes etc. yeah right and what was life expectancy back then 40 years? Stop dreaming and be realistic.

0 ( +0 / -0 )

@Larr Flint

There are too many instances of failures with regard to digital currencies not least governmental interference.

You are either very young or have a short memory or ...well, you obviously need to look at the issue of placing all your eggs in one basket...

1 ( +1 / -0 )

@kurisupisu

Bitcoin hasn't failed yet.

-1 ( +0 / -1 )

Does Japan know what digital means? Japan failed miserably in its digital transformation. Lack of creativity and ideas. This policy will get canned eventually.

1 ( +1 / -0 )

@ Fuzzy

How about thecriminal theft of various digital currencies?

1 ( +1 / -0 )

How about thecriminal theft of various digital currencies?

What about it? Some people’s coins weren’t stored properly and they were stolen. That doesn’t reflect on the underlying technology. That would be akin to saying that cash is a useless system because one time someone had their cash stolen.

-1 ( +0 / -1 )

I hope they heed the disaster called "the Euro." The last thing we need would be a "crypto crisis."

Would this be a rival to the yen? Would we pay our taxes with it? Would govt bonds be denominated in it? I really hope these questions are addressed, because the Euro architects never did.

And you’ll be safe in the knowledge that your government loves you.

I think it loves me a lot more than Satoshi Nakamoto does, whoever he/she/it is. No one knows, do they?

0 ( +0 / -0 )

I think it loves me a lot more than Satoshi Nakamoto does, whoever he/she/it is. No one knows, do they?

Beyond a point of interest, who he/they is/are is not relevant. You don’t think that person controls the network from the background do you?

-1 ( +0 / -1 )

@Strangerland

How about thecriminal theft of various digital currencies?

What about it? Some people’s coins weren’t stored properly and they were stolen. That doesn’t reflect on the underlying technology. That would be akin to saying that cash is a useless system because one time someone had their cash stolen.

My reply was aimed at Fuzzy where it was said that Bitcoin had not failed.

In this case, according to Forbes, it was Twitter that was hacked leaving many rich and famous individuals open to theft.

This allowed access into sites where the Bitcoins were stored.

The other examples, in recent times were 7Pay that allowed instant conversion of their digital money to untraceable goods.

Mt Gox where the inability of the court system to understand the complexities of the case and the law playing catch up means that even though it is known where the Bitcoins that many people may never see their money returned.

In order to steal a cryptocurrency, it is not even necessary to get out of bed.

They can be moved around eventually exploiting a weakness in hundreds of exchanges to become fiat currency.

The comparison that cash is a “useless system” (your quote) as it too can be stolen is lacking qualification.

Cash possesses some of the attributes of a cryptocurrency but cash must be physically removed and this requires physical access involving greater risk to the thief.

To access my cash means entry to my premises and through someone physically present and then access to my keyless 40kg safe.

Which system do I have more faith in?

As a disclaimer I should add that I do hold Bitcoin but the number is held on a paper ledger not online...

0 ( +0 / -0 )

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