Japan to push CBDCs, crypto regulation as top agendas for G7
Japan intends to make central bank digital currencies (CBDC) and cross-border regulation of cryptocurrencies a key topic in this year’s G7 meetings during its presidency, according to Masato Kanda.
Kanda is a top Japanese currency diplomat who currently serves as Vice Finance Minister for International Affairs. He made the comments during a seminar at the Peterson Institute for International Economics (PIIE) in Washington.
CBDCs
Kanda said the G7 member countries would make it a priority to help developing countries establish their own CBDCs and join the digitization race.
He added that the main concern is to ensure that countries meet the common standards developed by G7 central banks for retail CBDC. Kanda said:
“We need to manage risks from the development of CBDC by ensuring factors such as appropriate transparency and sound governance.”
Kanda said that despite the various benefits of digitization, it is important to ensure that these new systems do not compromise the stability of the overall financial system in the world.
Crypto regulation
Kanda said cryptocurrencies have enabled cross-border payments at an unprecedented level, with more people accessing the financial system than ever before. However, he added that crypto also brings with it myriad risks that need to be addressed via regulation.
G7 member states all agree that stronger cross-border regulation of crypto has become a necessity following the high-profile collapses and bankruptcies of the crypto industry in 2022, such as FTX – which was a “serious wake-up call,” according to Kanda.
“For crypto-assets, there are slightly divergent views between countries. But the consensus is definitely that we need more regulation, especially after the FTX shock.”
Kanda said there is an urgent need for harmonized rules for crypto across borders and added that the Financial Stability Board is the best regulatory body to tackle this issue.
Japan’s G7 Presidency
Japan will chair the G7 meetings this year, and Kanda’s remarks point to a future of widespread digital money, both in the form of CBDC and crypto.
Japan is arguably one of the most progressive countries when it comes to regulating the crypto industry and has leaned into its pro-crypto stance in recent months. The ruling party recently published a “white paper” with recommendations on how to grow the crypto industry in the country.
However, it is unclear whether Japan’s approach to crypto will be emulated by other G7 states. Regardless, the focus on CBDC and crypto will ultimately push adoption as more people become familiar with digital assets.
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