Japan’s Finance Minister Taro Aso warned the world off China’s digital yuan, saying more work is needed before any issuance. China is expected to introduce the currency later this year, and Japanese officials have repeatedly expressed reservations about such a move.
“There is a big risk in a central bank digital currency unless the regulation is well-sorted,” Aso told reporters in Riyadh, where G-20 finance chiefs held a meeting this weekend. “I would say ‘hold on’ for the issuance of a government-backed digital currency, at least for now.”
The G-20 communique said Sunday that risks associated with a digital currency should be evaluated and appropriately addressed before its issuance. China’s plan and Facebook’s efforts to launch its own Libra currency have sparked central banks around the world to get up to speed on how digital currencies would function and what their impact could be.
Aso said nations should be aware of the risk of China suddenly ditching its digital currency and causing chaos in the global economy.
The Bank of Japan is teaming up with other major central banks to assess potentially developing their own digital currencies. While Japan currently has no plan to issue a digital currency, concerns are growing among lawmakers that a digital yuan being proposed by Chinese authorities could destabilize an economic order that has been revolving around the U.S. dollar.