The head of the department of payment systems of the Bank of Japan, Kazushige Kamiyama, who deals with the digitalization of the yen, believes that the digital yuan does not threaten the reserve status of the dollar.
“The status of the dollar as a key global reserve currency will not change so easily,” the expert says. “In fact, the dollar could even strengthen if the US continues to move towards digitalization.”
This week, it became known that the Biden administration is increasingly monitoring China’s progress in launching the digital yuan, fearing that this could be a long-term attempt to dislodge the dollar from the pedestal of the world’s main currency.
Bank of China has every chance of becoming the first central bank in the world to launch its own virtual currency. The regulator is already conducting relevant experiments with the participation of consumers and companies across the country.
The Bank of China began working on digitalizing the yuan back in 2014, and its actions have sparked interest among central banks in other countries. The obvious success of cryptocurrencies and their increasingly widespread distribution, which has been observed in recent years, suggests that they are real competitors to fiat money, and that this fact can have a serious impact on the fundamentals of the functioning of the financial sector.
According to Kazushige Kamiyama, the Bank of Japan has no specific plans for a pilot test of the digital yen, but the banker denies that his bank is lagging behind colleagues. Last week, the Bank of Japan began the first phase of its own technical experiments with digital currencies, which also involve the Bank for International Settlements and six other central banks, including the Fed and the ECB.