With banks working feverishly to creating blockchain based currencies for use in interbank settlements, a new idea on March 17 may spell an even greater future for sovereign use of digital money.
This is because both Russia and Japan may soon be planning to experiment with the creation of a digital currency in their joint bi-lateral economic agreements over the contested Kuril Islands.
Russia, or rather the former Soviet Union, had co-opted the islands from Japan at the tail end of World War II. And ever since that time Japan's desire for their repatriation had been a major stumbling block in relations between the two countries.
But late last year Russia offered to allow Japan the opportunity to play a significant role in the economic expansion of the Kuril Islands, similar in ways to how Turkey and Greece politically deal with the ownership of Cyprus. And at the center of this agreement is the foundation to make the islands into a jointly run economic enterprise.
Yet one of the biggest road blocks in this agreement was in determining which currency would dominate the economy... ie... the ruble or the yen. And it is here that Japan is now suggesting the creation of an entirely new digital currency that would be unique to the islands and the trade agreement, and through which it could be easily transferable into whichever currency customers and retailers desired.
Tokyo has prepared a range of offers to Moscow for joint economic projects on Russia's Kuril Islands, according to Japan's national broadcaster NHK.
The package of proposals, including tourism and fisheries, as well as a common electronic currency, will be presented during the Russia-Japan consultations on March 18 in Tokyo.
According to NHK, the new regional currency could be used instead of the Russian ruble and the Japanese yen and is expected to contribute to the development of the southern Kurils and the northern Japanese island of Hokkaido.
Russian Foreign Ministry spokeswoman Maria Zakharova said on Thursday that Moscow is ready to review Tokyo’s proposals, adding that all the projects must comply with Russian law.
"Of course, we believe such projects can only be implemented if they are not inconsistent with Russian law. We are ready to assess Japan’s proposals," she said.
Agreement on joint Russian-Japanese economic activities in the South Kuril Islands was reached in December during President Vladimir Putin’s visit to Tokyo. In February, Japan established a special Council to consider cooperative projects in fisheries, seafood, tourism, environmental protection, and health in the economic zone. - Russia Today