A financial research institute has released a statement on legal proceedings following a digital currency for the Central Bank. Numerous countries are working towards having and using digital currencies. Japan seems to be the latest nation to jump on the wagon.
Even though Bank of Japan Deputy Governor said earlier this year that there were no plans to initiate a digital coin, the institute for economic research shows otherwise. It released a report that was looking at the legal issues revolving around digital currency.
A study group for legal issues on digital currency for the central bank was set up last November. The report stated that CBDC is following technological changes that are happening in the financial arena, such as changes in payment options and a reduction in the usage of cash in some nations.
The report does not denote the official stand of Japan’s financial institute, but it shows that the bank is considering legal options surrounding CBDCs. That includes even options of whether CBDC should be taken as a currency, whether the bank can give out a digital coin, and also if transactions can be constricted.
The bond of contention in Japan is that under the current regulations, legal money is considered to be cash and banknotes. A CBDC is neither of them and so the law has to be revised to accommodate the digital currency. Anti-money laundering is also a massive issue; according to the released report, records for transactions must be noted down, and all the identities should be verified. Financial institutions engaging in these transactions will be held accountable for verifying the identities of the users.
China’s investment stunts Japan’s interest in having a CBDC. China has recently invested a lot of resources in a bid to have their digital coin. The coin aims to increase financial coverage in rural China, this is according to a research team official from the China’s People’s Bank.