A senior official from the Bank of Japan (BOJ) warned the G7 nations that it is necessary to establish a common framework to regulate digital currencies as soon as possible..
The G7 refers to the Group of Seven, an intergovernmental political forum made up of Germany, Canada, the United States, France, Italy, Japan, and the United Kingdom.
The statement comes in response to the ongoing conflict between Russia and Ukraine, as cryptocurrencies and their possible applications to circumvent economic sanctions are under increasing scrutiny.
The head of the Bank of Japan’s payment systems department, Kazushige Kamiyama, told Reuters that the use of stablecoins makes it very easy to “create an individual global settlement system”, which, in turn, would make it easier for nation states to bypass more traditional and regulated payment systems that use the US dollar, euro or yen to liquidation.
Kamiyama added that A sense of urgency is paramount for the G7 nations to effectively coordinate the regulation of cryptocurrencies and digital assets, as current regulations do not fully take into account their increasing adoption and proliferation around the world..
Kamiyama added that this regulatory framework would affect the process of designing Japan’s central bank’s own digital currency (CBDC), the digital yen. Individual privacy would need to be carefully balanced against concerns about money laundering and other white-collar crime..
Bank of Japan Governor Haruhiko Kuroda announced Tuesday at Japan’s FIN/SUM fintech summit that he has no plans to introduce a CBDC anytime soon. Kuroda explained that the Bank of Japan plans to carefully study the intended roles of central bank money in the lives of Japanese citizens.
“We consider it important to prepare thoroughly to respond to changing circumstances in an appropriate manner, from the point of view of ensuring the stability and efficiency of payment and settlement systems in general.”
Kuroda’s remarks come just four days after The Bank of Japan will announce that it is moving to the second phase of the feasibility tests of a Japanese CBDC. The second phase will start this month, so any new regulations decided by the G7 will have some impact on this process.
Kuroda said that a decision on CBDC issuance in Japan will most likely be made sometime in 2026, depending on the speed at which CBDCs are adopted in the rest of the world.
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