A senior official from the Bank of Japan (BOJ) warned G7 nations that a common framework for regulating digital currencies needs to be put in place as quickly as possible.
G7 refers to the Group of Seven, an inter-governmental political forum made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
The statement comes in response to the continued conflict between Russia and Ukraine, as cryptocurrencies and their potential applications for skirting economic sanctions fall under increasing scrutiny.
Head of the BOJ‘s payment systems department Kazushige Kamiyama told Reuters that using stablecoins makes it very easy to “create an individual global settlement system,” which would, in turn, make it easier for nation states to evade more traditional and regulated payment systems that use the U.S. dollar, euro or yen for settlement.
Kamiyama added that a sense of urgency is paramount if the G7 nations are to effectively coordinate regulation of cryptocurrencies and digital assets, as the current regulations do not fully consider their growing adoption and proliferation throughout the world.
Kamiyama added that this regulatory framework would affect the design process of Japan’s own central bank digital currency (CBDC) — the digital yen. There would be a need to carefully balance individual privacy with concerns about money laundering and other white-collar crimes.
The governor of the BOJ, Haruhiko Kuroda, announced at Japan’s FIN/SUM fintech summit on Tuesday that it has no plans to introduce a CBDC anytime soon. Kuroda explained…