China could take a decisive advantage in the “new battlefield” of digital currencies.
The Japanese government has re-raised concerns about the rapid progress of China’s planned central bank digital currency (CBDC)
Kenji Okamura, Japan’s senior financial diplomat, has accordingly warned the global community of the possible risks associated with China’s “digital yuan”, Reuters reported on October 9th.
According to Okamura, the development of the digital currency is progressing “in great strides”, with China deliberately aiming to be the first country to launch its own CBDC on the market.
“We should be afraid of the first mover advantage”, as Okamura therefore said in a digital conference of the central banks. The first mover advantage is an advantage that arises for the market participant who enters the market first.
Okamura adds:
“The great advantage that arises from this is that you can be the first to determine the design standards and the technological platform that everyone who wants to use their digital currency would have to orientate themselves by.”
The warning from the Japanese diplomat comes just a short time after a Chinese magazine published by the country’s central bank announced that China will be the first nation to launch its own digital currency in 2020. In the accompanying article, the authors predict that the central bank digital currencies will become the “new battlefield” between the nation states.