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Japan is losing the crypto race against China

Photo of: Joseph Stone
by Joseph Stone

According to a Japanese expert, Japan could be up to six years behind China in advancing its digital currency.

According to an article published by the Japanese media outlet Record China, former Pan Pacific director and long-time observer of China Yusuke Takano, China is trying to “take the lead in the blockchain sector globally through a concerted national effort”.

Mr. Takano said that while Japan was clearly making efforts in the blockchain sector, those efforts were often paltry compared to those in China.

The columnist said that a glance at the reports of the blockchain conferences proved Beijing’s sincerity in the field. He pointed out that although a major event co-organized by the Chief Financial Regulator, Financial Services Agency, and Nikkei Media Group took place in August in Japan, four major blockchain events took place in China in the same month.

In addition, four more such major conferences are scheduled to take place in China before the end of the year, while Tokyo may have to wait until 2021 to host the next such conference.

As far as the progress of the Central Bank’s Digital Currency (CBDC) is concerned, Beijing also has the upper hand, the columnist added. For example, the Chinese central bank has launched a CBDC research unit as early as 2014.

Mr. Takano noted that a series of articles have been published on Chinese state-affiliated websites recently, highlighting the similarities between the digital yuan and electronic payment platforms such as WeChat Pay and Alipay, a possible sign that a rollout is imminent.

The People’s Central Bank of China (PBoC) has talked about replacing cash with digital currency as early as January 2016, and that’s when the digital yuan project was launched “for good,” Takano noted.

He added that by mid-2018, China’s state-run TV stations had broadcast a series of programs denouncing cryptocurrencies, but praising the merits of blockchain technology: “no-coin blockchain technology”.

The columnist noted that China has been relatively transparent about its goals of refusing to process crypto-actives and publishing its CBDC as well as trying to become the world leader in the blockchain industry.

In very brief terms, Takano wrote: “China’s blockchain strategy is clear.”

The author noted that practical and concrete blockchain projects in the domains of healthcare and trading are already underway in China.

Japan, on the other hand, has been going back and forth with its own policy regarding its CBDC, with digital yen issuance projects only really starting this year. Progress on the blockchain in Japan has also been slower than in China.

The author concluded by asking the following question: “Japan started its CBDC project six years behind China. Only experts really pay attention to the relatively few blockchain conferences held in Japan. Will Japan react?”