Japanese Politicians Urge Tokyo to Speed Up CBDC Efforts

A currency arms race is brewing in Asia. A Minister for Economic Security, and a former Bank of Japan governor say Tokyo must act faster to create a CBDC in light of China and Europe’s efforts.

article-image

Tokyo, Japan; Source: Shutterstock

share

key takeaways

  • Takayuki Kobayashi, Japan’s minister of economic security, says it’s a matter of national interest that Tokyo speed up efforts in developing a Central Bank Digital Currency in light of China and Europe’s moves
  • Japan supports the dollar’s reserve currency, which is something that CBDC’s might threaten but China has backed off that idea for now

Two prominent Japanese political officials have said that developing a CBDC is a matter of national security for Japan, and efforts need to be accelerated, in light of China’s moves to roll out its own by next year. 

“We must think about what could happen to Japan’s national security if other countries move ahead on CBDC,” Takayuki Kobayashi, a minister overseeing economic security, told Reuters Wednesday. “Japan must speed things up so it’s ready to issue a digital yen any time.”

The Bank of Japan began the first, initial stages of creating a digital Yen in April, with early targets for a launch in 2023. However, China’s continued efforts with the eCNY seem to have spooked some officials in Tokyo who think that it could take on the US dollar’s hegemony — despite the People’s Bank of China’s whitepaper downplaying that idea and instead saying the eCNY is meant to replace domestic cash

China’s PBoC has also said that one of the first use cases of the eCNY will be for cross-border settlement between China, Hong Kong, and Macau. The two territories of the country administer their own currencies; the Hong Kong Dollar is one of the CNY’s most traded currency pairs because the HKD is freely convertible, unlike the CNY.

But unlike the CNY, and eCNY, Japan doesn’t have the same problem of mobile payment apps dominating the country’s money supply. So until politicians in Tokyo began pushing the national security angle to a CBDC, there wasn’t the same incentive to deploy one as there has been in Beijing. 

In an October announcement, the Bank of Japan said that it intends to launch a Japanese CBDC with as many off-the-shelf materials as possible using existing technology to ensure “vertical coexistence” with other existing payment mechanisms. 

Sources from Prime Minister Fumio Kishida’s administration that spoke with Reuters said that Tokyo would “work closely with the United States to counter any attempt that threatens the dollar’s reserve-currency status.”

Takahide Kiuchi, a former Bank of Japan board member, and now resident economist at the Nomura Research Institute also said to Reuters that if China launches a CBDC and the European Central Bank follows suit it would “have a huge impact on Japan and pile pressure on the BOJ.”


Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.


Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (10).png

Research

Innovations on Aptos’ technical design through Raptr, Shardines, and Zaptos approach near-optimal latency and throughput by unlocking 100% utilization of network resources, with the capacity to settle 260k transactions per second with latencies less than 800ms. The original Move language was revamped with the launch of Move 2, supporting more expressivity in smart contract logic and a scalable ability to interact with high volume datasets. The ecosystem has benefitted from strong asset inflows, now hosting over $1.3B in stablecoins, $450M in bridged BTC, and $530M in RWAs. Activity in the Aptos ecosystem has grown notably over the past year, with monthly application revenue reaching ~$835k and monthly DEX volumes growing to over $5B, both at new all time highs.

article-image

Interchain Labs will focus on sovereign L1s and institutional demand, abandoning plans for smart contracts on the Cosmos Hub

article-image

Also, only three tokens have outperformed bitcoin so far this year: XMR, HYPE and SKY

article-image

The fund group has submitted proposals in recent months for other funds that would hold litecoin, solana, XRP, HBAR, Sui and others

article-image

Momentum’s back — BTC leads, risk assets follow

article-image

Ondo Finance’s acquisition of blockchain development company Strangelove follows its buy of Oasis Pro

article-image

Cryptocurrency and stock traders alike had a lot to unpack Wednesday