Japan is behind in establishing a digital central bank currency and should support the United States in establishing a digital dollar, says Takaya Nakamura, an executive with the Japanese Fisco crypto-currency exchange.
The Japanese government is reportedly planning to soon include consideration of a central bank digital currency (CBDC) in its official economic plan, but the country is considerably behind China’s efforts with the digital yuan.
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In the global competition for supremacy of digital currencies, Japan’s role should be to urge the United States to take CBDC more seriously, Nakamura told Cointegraph. „Japan no longer has the national power to do anything independently,“ he said.
„Therefore, it is understandable if they want to collaborate with other Bitcoin Formula advanced countries and have an influence on the development of digital currencies“
The Bank of Japan has already begun working with the central banks of Britain, Canada, Sweden and Switzerland on research into digital currencies. The United States is not yet included in the coalition.
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Japan is dependent on the United States both economically and militarily. In addition, Japan maintains most of its foreign exchange reserves in US dollars. Therefore, it would be „difficult for Japan to let go of U.S. dollars,“ Nakamura said.
„European countries may be thinking differently, but Japan is not even ready for CBDCs and that is not good. I think Japan would hope that the United States would go ahead and block the rise of the digital yuan by digitizing US dollars.
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When will the U.S. movement occur?
Last month, Federal Reserve Chairman Jerome Powell did not reveal any concrete progress on the digital dollar. But speaking before the House Financial Services Committee, Powell stated:
„If this is something that’s going to be good for the United States economy and for the world’s reserve currency, which is the dollar, then we have to be there and we have to understand it first and best.“
Nakamura attributes the Federal Reserve’s slow response to its already established advantage under the current dollar system. But he believes that as China becomes more aggressive with its CBDC and breaks the stronghold of dollar hegemony, the United States will have no choice but to move forward with the digital dollar.
Another possibility would be to use a Facebook version of the pound. In April, Libra changed its white paper to apparently engage with U.S. regulators.