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A Journalist from Nikkei FinTech says Japan will likely introduce a central bank digital currency (CBDC) around 2030. The news is polarizing to many, as some Ripple adoption hopefuls see the potential move as a boon to their bags, and sceptics see little more than a draconian corruption of cash.
Anyone who’s lived in Japan for the last few years can see it: the long-time “cash is king” society is starting to reject paper money and coins. The trend has begun to take hold in urban centres like Tokyo, with restaurants refusing physical yen, but could easily become a nationwide norm, in lockstep with global political movements.
Talk of going cashless inevitably brings up the topic of crypto, stablecoins, and CBDCs (central bank digital currencies). For his part, Japanese Journalist Shinichi Morikawa at Nikkei Fintech thinks Japan might be barreling right into adoption within the next half-decade.
‟Japanese CBDC to be adopted in wake of Europe’s lead”
At a recent fintech-focused event in Tokyo, Morikawa said of CBDCs (translated by Google):
“The EU’s movement will be a catalyst, and after 2028, when the introduction is expected to start in the EU, it will probably start to be introduced in Japan around 2030.”
The Bank of Japan (BOJ) has been issuing its positions on the topic of central bank digital money for some time now, with a foundational statement back in 2020, and an April 2024 update entitled “Central Bank Digital Currency Experiments Progress on the Pilot Program.” This news has some crypto proponents — especially of assets like XRP — excited for the future.
XRP fans hopeful of CBDC bag-pump
While the monolithic digital asset infrastructure group Ripple is indeed working with banks in Japan and across the globe, and looking to issue stablecoins and supply their XRPL ledger as the foundation for government projects, hype and half-truths abound.
For example, a pesky scam involving false news about XRP adoption in the land of the rising sun has been shared all over social media in recent months.
Mass scrambling and unthinking FOMO is understandable in the current environment, where Ripple CEO Brad Garlinghouse can’t stop praising Japan’s crypto infrastructure and Yoshitaka Kitao, president and CEO of financial giant SBI Holdings (part of Japan’s CBDC forum) has proclaimed:
“We are the largest external shareholder of Ripple Labs, a US company that develops a next-generation remittance system using blockchain technology.”
Further, CBDC discussions at high political and corporate levels are active and ongoing in Japan, with the Japan Blockchain Association (JBA) set to discuss global CBDC trends next week. For many XRP holders, this all seems to signal good news for their bank accounts.
But there’s more to consider than just getting rich.
Japanese rejection of CBDC and economic privacy invasion
“CBDCs would have an authoritarian element, allowing the central bank to directly control individuals’ buying and selling, and could easily use AI algorithms to block certain people or goods from purchasing,” one Japanese speaking BOJ-watcher on social media has noted.
As outlined in the Bank of Japan’s documents on the topic, “the declining birthrate and aging population, as well as population outflow to urban areas, are increasing the cost of circulating cash throughout the country, and in some areas, it may become more difficult for residents to access cash in the future.” This sounds like a good thing superficially, but the sceptic might see a plan to stop circulating cash between the lines.
Morikawa’s choice of 2030 as a date for the entrance of Japan’s CBDC also won’t sit well with Japanese sceptical of the United Nations’ “2030 Agenda,” and related Sustainable Development Goals. Some believe a CBDC will be tied in with Japan’s “My Number system,” which is a kind of catch-all social ID for residents of the country.
“The movement to consider CBDC (Central Bank Digital Currency) is unstoppable around the world, and I believe it will be introduced in Japan in the future,” Morikawa emphasizes.
But for those who see a nightmare instead of paradise on the horizon, Japan’s old school cash mentality, precious metals, and true peer-to-peer crypto are a better solution.