A senior Bank of Japan official warned the G7 countries that a common framework for regulating digital currencies should be created as soon as possible. The G7 assigns to the team of Seven an intergovernmental political forum. Therefore, it includes the following countries: Italy, the UK, Germany, Japan, Canada, France, and the USA.
The statement is a response to the Russia-Ukraine war. Cryptocurrencies and their potential applications to avoid economic sanctions are receiving increasing attention. In fact, the head of the payment systems department of the BOJ said; that the use of Stabilcoins makes it very easy to create an individual global payment system. This, in turn, will make it easier for nation-states to avoid more traditional and regulated payment systems; that use USD, EUR, or YEN for settlements.
He said the sense of urgency was crucial if the G7 countries coordinated effectively to regulate cryptocurrencies and digital assets. Also, current regulations do not fully address their growing acceptance and distribution worldwide. It is worth noting that this regulatory framework will influence the design process of the digital currency of Japan’s central bank – the digital yen. In addition, careful balancing of individual privacy with concerns related to money laundering and other crimes will require.
Bank of Japan and Crypto
The BOJ governor announced at the Japan FIN/SUM Fintex summit on March 29 that he had no plans to introduce the CBDC. According to the governor, the BOJ plans to carefully consider the expected role of central bank money in the lives of Japanese citizens. Also, in his view, it is essential to be thoroughly prepared to respond appropriately to changes in circumstances; ensure the stability and efficiency of the overall payment, payment systems.
These remarks came just four days after the BOJ announced that it was moving into the second phase of the Japanese CBDC viability test. It is worth noting that the second phase will begin this month. Therefore any new regulation decided by the G7 will impact this process. The decision on whether the CBDC will release in Japan in 2026. It depends on how fast the CBDC is getting in the rest of the world.
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