The Japanese Ministry of Finance is expanding its workforce in order to implement more stringent global regulations for digital currencies, particularly fiat-pegged stablecoins. Japan is reportedly beefing up its efforts to regulate digital currencies on a worldwide scale, with various government agencies aiming to hire more people to enforce stricter regulations.
According to Reuters, Japanese regulators have expressed new concerns about the enormous growth of the cryptocurrency market, warning against stablecoins in particular. Three Japanese officials allegedly stated that Tokyo is eager to work with global financial regulators to develop stronger rules for private digital currencies, noting that G7 and G20 group authorities have advocated for stricter controls for fiat-pegged stablecoins.
“With worldwide advancements in digital currencies advancing at such a quick pace,” one official added, “Japan can no longer leave things unattended.”
According to the article, the Japanese Ministry of Finance is considering hiring more people to help with its attempts to monitor the industry globally. According to reports, the country’s Financial Services Agency (FSA) has already set up a new unit to supervise digital currency regulation.
The new FSA section was established on July 8 with the goal of monitoring broader crypto markets and focusing on decentralized finance, which is a blockchain-based type of financing that does not rely on centralized financial intermediaries, according to officials.
Crypto industry drawing increased attention from global regulators.
Many authorities are particularly wary about stablecoins, a sort of cryptocurrency that is linked to assets or fiat currencies like the US dollar. To preserve control over money, central banks around the world have been pushing central bank digital currencies, which are digital equivalents of national fiat currencies.
A US CBDC would reduce the need for private choices like as Bitcoin and stablecoins. Last week, deputy governor of the People’s Bank of China, Fan Yifei, warned that the rapid expansion of private payment systems is concerning, and that stablecoins constitute a severe threat to global financial and settlement systems.
In 2022, Japan’s financial industry will have a better understanding of the digital yen.
To offset China’s success with its digital yuan, the digital yen should be compatible with other CBDCs, according to one official. According to a ruling party official, Japan will have greater clarity on the architecture of its central bank digital currency (CBDC) no later than late 2022.
The Bank of Japan (BoJ) is still working on sorting out the key functions of the digital yen, such as defining what entities would serve as intermediaries between the central bank and its deposit holders, according to Hideki Murai, the head of the ruling Liberal Democratic Party of Japan’s panel on digital currencies.
In a Friday interview with Reuter’s, Murai stated, “By about the end of next year, we’ll have a clearer understanding of what Japan’s CBDC might look like.” According to the official, the Bank of Japan does not expect to make a decision on whether to issue a digital yen by the start of the second phase CBDC testing, which is set to begin next year.
More information on Japan’s CBDC design, on the other hand, could spark a debate about how the digital yen will effect financial institutions, according to the official. Non-bank enterprises are rapidly supplying means for online settlements in Japan’s financial industry, which is already undergoing considerable changes.