The Liberal Democratic Party, Japan's ruling party, is reportedly working on a new proposal which would see the Asian country issue a digital currency in response to China's efforts to create digital yuan, Cointelegraph reports on January 25th.
According to a reports from Reuters, the currency would be developed by the government and private companies and the proposal on its creation guidelines is currently being worked on by a 70-strong lawmaker team. The initiative represents a significant turn of events compared to the statements issued by the government back in December 2019, claiming there is no need for a digital currency in the country.
It would appear that the decision to develop a digital currency was forced upon the Japanese ruling party by the fear of the effects Chinese digital currency might produce on neighboring economies. This would also explain why a country which still entertains one of the highest rates of fiat payments in the world and tends to cling to traditional is suddenly considering a digital currency. As we've discussed at the time, this change in stance might come at a big cost for Japan, as the time spent considering all options is now time that could have been spent on development - thus it remains to be seen if the digital currency arrives soon enough to rival the digital yuan.