Despite the global financial chaos as a result of the coronavirus pandemic, countries continue to contemplate launching a central bank digital currency (CBDC).

Kozo Yamamoto, Liberal Democratic Party (LDP) Member of the House of Representatives and a former official at the Ministry of Finance, said in an interview with Cointelegraph Japan that the country should implement a CBDC, and quickly.

Yamamoto discussed money’s three conventional roles – a medium of exchange, a store of value and a unit of account. The former Ministry of Finance official said large organisations such as Facebook should be able to issue tokens and control the "medium of exchange and store of value." 

Nevertheless, he went on to add that the “unit of account” needs to be government controlled. Yamamoto said if this wasn’t the case, people could forget about traditional fiat currency.

"We must protect it (the role of a unit of account) no matter what. If Japan doesn't issue a digital currency and people in the world use other digital currencies, the Japanese yen will be forgotten and lose its sovereignty,” he stated.

Yamamoto added that a digital yen could be a type of bridge currency between other digital currencies. Should GAFA (Google, Apple, Facebook and Amazon) issue their own tokens, he said they will be utilised within their own walls and have no interoperability between one another. As such, CBDCs could fill this gap, he added: "It is easiest for operators to use just one currency but for customers it is inconvenient." 

As part of an interview with Reuters in February, Yamamoto said Japan should devise its own cryptocurrency “within two to three years”. During the interview with Cointelegraph Japan he said that action should be taken as soon as possible.

Yamamoto added he believes it is "meaningless" if blockchain is not used for a central bank digital currency as it can track when money is stolen, as Know Your Customer checks are introduced for transactions over a specific amount.