Top execs from the central banks of Europe, Canada, Japan, Sweden, Switzerland, and the UK — as well as the Bank of International Settlements — formed the group in January to set governance standards digital currencies. It will reportedly discuss how central bank digital currencies (CBDCs) can make international transactions more convenient, as well as strategies for keeping such systems secure. [READ: Libra exec promises Facebook’s plan isn’t to replace existing currencies] The move is seen as a response to Facebook’s plans to issue its own ‘cryptocurrency,’ Libra. Still in development, it had regulators worldwide whipped into a frenzy for the better part of last year, who feared privately-issued digital currencies could undermine demand for fiat, specifically the Euro.
China’s digital currency plan unsettles Japan
China too plans to issue digital yuan, with its government already preparing communist party cadres for the technology with an official digital currency handbook. This prospect has already ruffled feathers, specifically in Japan, where a senior lawmaker said he senses the digital yuan represents “a challenge to the existing global reserve currency system and currency hegemony.” He then called for closer co-operation with the US on the matter, Bloomberg noted Thursday, adding that proposals for preparing Japan’s economy for digital currencies were to be published Friday. A former Bank of Japan (BoJ) exec reportedly noted in a separate interview that Japan’s economic power and influence in the mid-to-long term would decline if China’s digital yuan is more widely used than the yen. At present, BoJ doesn’t have an official plan to issue digital currency, but considering its the only Asiatic member of the recently-formed central bank ‘think tank,’ odds are we’ll be see one announced after the group presents its interim findings in June.
