Japan is feeling the pressure of China’s harrowing progress with a digital yuan. According to a February 7 Reuters report, top legislators in the Country are calling on their government to ensure that digital currencies are placed on the G7 agenda this year.
Akira Amari, former Economy Minister and a Prominent Member of the ruling Liberal Democratic Party told a group of lawmakers that they were meeting to discuss the issue that:
Japan must work closely with the United States. As part of such efforts, we must ask the United States to be on the G7 agenda as a (digital currency). The US, leading the G7 meetings in 2020, is the focus of Akari’s concern because of its vision that the prospect of a digital yuan could challenge the hegemony of the dollar thereby building the global network of financial and geopolitical relationships based on his role:
“We live in a stable world led by dollar settlement. How should we respond if such a foundation collapses & China’s move gives rise to a fight for currency supremacy? “
In a country that is heavily dependent on settlements expressed in dollars, other high-level legislators allegedly share Akari’s concerns, given that the digital yuan is highly accepted, especially in emerging economies.
As mentioned, Akari is not alone in his view that the Chinese central banking project (CBDC) could evolve from the central bank into a powerful soft power tool. An American journalist recently argued that:
“China could force other countries to go digital in the same way. China could make payments from countries with Chinese power plants or other infrastructure improvements built under the ‘Belt & Road Initiative’ in the Chinese digital currency mandatory.
Huge companies doing business in China can be forced to adopt in the same way. “
Although the pursuit of a digital dollar is still largely theoretical, a member of the Federal Reserve Board of Governors this week indicated that the institution is more open to the idea of CBDC than before.