Kozo Yamamoto, a senior lawmaker from Japan’s ruling Liberal Democratic Party,

has called for the development of a digital yen within “two-to-three years” to counter the digital currency initiatives of China and Facebook. According to Reuters, Yamamoto commented a draft proposal for the development of the government’s digital currency will be included in the government’s policy guidelines.

He was quoted as saying:

The sooner the better. We’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years.

The lawmaker’s proposal comes shortly after a group of Japanese lawmakers proposed the creation of a digital yen over concerns surrounding the Libra stablecoin and China’s digital currency initiative. Speaking to Reuters, Yamamoto revealed he will be working with the lawmakers, led by ruling party heavyweight and former economy minister Akira Amari, to push the government to adopt their proposals.

The news outlet notes that Japan is unlikely to issue its own digital currency in the near future over the technical and regulatory challenges associated with the move. The proposals, however, show Japan wants to curb the potential influence China’s digital currency and the Libra cryptocurrency may have. Japan’s central bank has been participating in initiatives to research central bank digital currencies (CBDCs) and their potential impact. As reported, it recently joined hands with the central banks of the European Union, Canada, England, Sweden, and Switzerland to explore digital currencies. These digital currencies, Yamamoto said, could help stabilize emerging markets that rely heavily on currencies like the U.S. dollar.

He said:

If each country manages to control flows of money with their own (digital) currencies, that could prevent a big swing at a time of crisis and stabilize their own economy.