Japan, USA, and Europe unite to counterbalance! G7, without China, will collaborate on Central Bank Digital Currencies (CBDCs)

The G7 meeting, originally scheduled for June, has been postponed to late August due to the pandemic. According to Kyodo News, the G7 has decided to collaborate on central bank digital currency (CBDC) issuance.

The report pointed out that China is leading in the development of digital currencies and expanding its influence to emerging market countries. This move could potentially threaten the current system based on the US dollar as the dominant currency, prompting cooperation among the liberal democratic camps of Japan, the US, and Europe. The G7 has previously stated that considering central bank issuance could usher in a new phase for digital currencies. The G20, including the G7, is set to release regulatory methods for international stablecoins (e.g., Libra) in October.

【Note】: The G7, Group of Seven industrialized nations, include the US, Canada, UK, France, Germany, Italy, and Japan. The G20, which includes China and replaced the G7 in 2009, now holds the position for coordinating international economic cooperation, but the G7 meetings continue.

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Digital Yuan Raises Concerns

According to government sources, Japan has proposed discussing the use of China's digital yuan as an international settlement method at the G7 summit. Concerns have been raised about the risks associated with the vast personal information that the country would have access to, including users' purchase history, as well as issues related to money laundering. The U.S. has also expressed willingness to address these concerns and is expected to reach a consensus at the meeting.

Japan Actively Developing Digital Currency, Mitsubishi UFJ Bank to Launch MUFG Coin

During an extraordinary cabinet meeting on the 17th, the Japanese government finalized the "Basic Policies for Economic and Fiscal Management and Reform," which includes plans for central bank digital currencies to be discussed in collaboration with other countries.

Japan's largest financial group, Mitsubishi UFJ Financial Group (MUFG), is set to launch a digital currency called "Coin" in the second half of this year. "Coin" will have a 1:1 exchange rate with the Japanese yen and can be used for payments or exchanged back to cash into bank accounts. Additionally, it is expected to be usable on Japanese travel booking website Jalan and food discount coupon website Hot Pepper Gourmet after its launch.