A senior Bank of Japan (BOJ) official has warned G7 nations that the clock is ticking on a common framework to regulate cryptocurrencies, reports Reuters.
The BOJ official warned G7 policymakers to quicken efforts to curb risk of crypto-powered sanction evasion in light of the ongoing conflict in Ukraine.
Appropriate measures need to be put in place before cryptocurrencies “upend” the global settlement system, they claimed.
“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.
Kamiyama said the priority is to bring current rules up to speed with the rapidly evolving crypto industry. He added the G7 is “working together while sharing information on current developments.”
Indeed, Japan seems hellbent on regulating crypto in the face of Russian President Vladimir Putin’s invasion of Ukraine.
Earlier this week, Chief Cabinet Secretary Hirokazu Matsuno informed Japan’s government of new proposed amendments to the Foreign Exchange and Foreign Trade Act.
The amendments would force crypto exchanges in line with traditional banks in enforcing sanctions.
New G7 rules could affect Japan’s plans for a digital yen
Any new rules agreed by the G7 — particularly around money laundering or privacy — could have knock-on effects when it comes to Japan’s ambitions for its own central bank digital currency (CBDC).
The BOJ already has the new digital yen in the works. The project set to enter the next phase of development in April, so any new regulations may have to reflect incoming central bank-sponsored stablecoins.
However, any official launch date will likely depend on 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, our emphasis.
“Japan needs to make sure it’s not left behind.”
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