Japan seems fully committed to the digital yen and it appears that the country is speeding up its currency digitization efforts. However, according to a local currency official, before the country launches its state-backed digital asset, they first have to focus on structuring their broader crypto industry. One of the top economic policymakers in the Asian country, Kozo Yamamoto called on the Bank of Japan to adjust its mandate and responsibilities when it comes to the development and operating a Central Bank Digital Currency (CBDC). Yamamoto is a former worker of the Ministry of Finance and is now serving as the head of the council of financial efforts for the Democratic Party.

According to the report, Yamamoto said that some adjustments were needed to the laws of the Bank of Japan because it would be helpful in handling a number of changes that would result because of the CBDC. Some of these changes would include inflation management, job creation, and a lot more. He said that similar to the U.S. Federal Reserve, the Bank of Japan needs to set inflation and job creation as its mandate. He said that they need to clarify that their target is to achieve 2% inflation. 

Where cryptocurrency adoption is concerned, it can be said that Japan has become one of the most progressive nations in this regard. However, one well-known fact is that the Central Bank Digital Currency (CBDC) will not function like any other private digital asset in the market. According to Yamamoto, if the Bank of Japan wants to handle such a project in an efficient way, they would also need to evolve. Yamamoto has been an avid supporter of the digital yen and has been one of the most prominent voices behind it. In February, he had called on the Japanese government to develop a digitized currency. 

He also said that such a launch would be vital for the economic survival of the country in the long-term. The calls of the policymaker came after China had made significant progress in its development of a CBDC. Yamamoto said that the rapid growth of digital currencies worldwide would assist China in improving its hegemony because its digital currency would be regarded as the de facto global standard. Hence, he said that Japan had to come up with a CBDC quickly for its own survival. The former Minister is just one of the numerous people who have urged Japan to take quick actions in the wake of China’s progress on a digital yuan.

Luckily, these calls have been heeded by the Bank of Japan and the Japanese government and they are now moving through the development process quickly. Last week, it was confirmed that the Bank of Japan would be launching some pilot testing programs for the digital yen next year. According to the document sent to the Bank of International Settlements, the BOJ will focus on the asset and its ability to be used in emergencies. They want to develop an asset that can work in disastrous conditions.