Prime Minister Shinzo Abe’s “Abenomics” which promised to reverse two decades of near-zero growth and stagnating prices in the world’s third-largest economy, doesn’t seem to be working. The critiques are rife as they believe the Prime Minister hasn’t done enough to deliver on his promises of an economic revival when he took power nearly six years ago.
But one thing in their favor is that the Island nation has embraced cryptocurrencies with both hands, which many experts believe could change the way Japanese economy to boom
The current state of the Japanese economy
Over past few months, the Japanese economic growth has been slightly positive business confidence is slowly gaining pace, but Japan still faces a daunting list of challenges that it is struggling to tackle. Japan is the world’s most severely indebted rich country, with government debt is more than twice as big as the national economy. The government needs to raise money to pay down this debt, but it also needs more cash to spend on social care for its already aging population. Japan also face the problem of labor, even after unemployment rate is enviably low.
Wage rates are not picking up which is drying the consumption in the country. Consumers are putting off purchases while companies find it hard to increase profits, leaving them with less cash to invest in new products or higher wages. Japanese companies are also not able to keep up with Industrial growth leading to stuttering growth. To quote a few prominent voices Professor Thomas Clarke, director at the center for corporate governance at Sydney’s UTS Business School was quoted saying
“The worry might be that the competitiveness and standards of Japanese corporations are slipping,”
Things don’t seem to be falling in place really soon as Japan is slowly pushing back t innovation, the thing that bought it on the top.
Crypto could be a savior
As the economy struggles to live up, a lot of prominent industry experts believe blockchain and cryptocurrency innovations and acceptance with regulatory favors would gradually shift away from Japanese economy, from its export-driven model of GDP growth towards a more sustainable path. Japan, lately hosted a major blockchain conference in Tokyo which saw a few opinions and support in the favor of countries efforts with respect to blockchain and bitcoins.
The major one being that some BOJ officials admitting cryptos have some potential. At the conference, CEO of financial services provider SBI Holdings Yoshitaka Kitao said blockchain technology could reinvigorate Japanese GDP expansion after decades of disinflation and tepid economic growth. According to Mr. Kitao, the innovations and expansions around blockchain and bitcoin would also support existing businesses. He gave an example that crypto mining would actually bring up expansion in the renewable energy sector.
Separately, Aaron McDonald of New Zealand-based marketplace Centrality said Japan and the broader East Asia region could become the global driver of growth in innovative crypto and fintech industries, which could produce massive and sustainable revenues in the longer run.
Japan definitely looks on the way of turning tables for its economy with bolstering innovation in blockchain and cryptocurrencies. With BOJ officials working to assess whether digital currencies would actually offset the country’s economic issues, only time will tell whether Japan can rewrite the story of its leadership in innovation and sustainable economics.
Will Crypto help Japan sustain its global position in economics and innovation? Do let us know your views on the same?