In light of the ongoing conflict in Ukraine, the BOJ official urged G7 policymakers to accelerate efforts to reduce the risk of crypto-powered sanction evasion.
They claimed that appropriate safeguards must be put in place before cryptocurrencies “upend” the global settlement system.
“By using stablecoins, it’s not very difficult to create an individual global settlement system,” Kazushige Kamiyama, head of the BOJ’s payment and settlement system department, told Reuters.
According to Kamiyama, the priority is to bring current rules up to date with the rapidly evolving crypto industry. He went on to say that the G7 is “working together while sharing information on current developments.”
Hirokazu Matsuno, Japan’s Chief Cabinet Secretary, informed the Japanese government earlier this week of new proposed revisions to the Foreign Exchange and Foreign Trade Act.
The amendments would require crypto exchanges to enforce sanctions in the same way that traditional banks do.
New G7 rules may have an impact on Japan’s plans for a digital yen
Any new G7 rules, particularly on money laundering and privacy, could have ramifications for Japan’s ambitions for its own central bank digital currency (CBDC).
The BOJ is already working on a new digital yen. Because the project is set to enter the next phase of development in April, any new regulations may need to account for incoming central bank-sponsored stablecoins.
Any official launch date, however, will most likely be determined by the CBDC timelines of other central banks around the world.
Given how so many advanced nation central banks are moving collectively, dramatically and simultaneously on CBDC, it could cause big changes in the settlement system in the future,” Kamiyama told Reuters, emphasizing his point.
“Japan needs to make sure it’s not left behind.”