According to a Feb. 7 Reuters report, top lawmakers in the country are calling on their government to push for digital currencies to be placed on the G7’s agenda this year.
Japan is feeling the pressure of China’s strident moves forward with a digital yuan.
Akira Amari — former economy minister and a prominent member of the ruling Liberal Democratic Party — told a group of lawmakers convened to discuss the matter that:
“Japan should work in close coordination with the United States. As part of such efforts, we should ask the United States to set (digital currency) on the G7 agenda as chair.”
An end to the global dollar order?
The U.S., which is leading the G7’s meetings in 2020, is the focus of Akari’s concerns due to his view that the prospect of a digital yuan could challenge the dollar’s hegemony — and thus upend the global network of financial and geopolitical relationships built upon its role:
“We live in a stable world led by dollar settlement. How should we respond if such a foundation collapses and if (China’s move) gives rise to a struggle for currency supremacy?”
In a country that relies heavily on dollar-denominated settlement, other high-level lawmakers reportedly share Akari’s concerns, considering that the digital yuan may see high adoption among emerging economies in particular.
As reported, Akari is not alone in his view that China’s central bank digital currency (CBDC) project could evolve into a powerful soft power tool. One U.S. journalist recently argued that:
“China could force other countries to similarly go digital. China could mandate payments from nations with Chinese power plants or other infrastructure improvements built under the ‘Belt and Road’ initiative be in the Chinese digital currency. Enormous companies doing business in China could be similarly forced to adopt.”
While any pursuit of a digital dollar still remains largely theoretical, this week a member of the Federal Reserve’s board of governors signaled that the institution is more open to the idea of CBDC than previously.
Judge Gives Preliminary Approval for $25M Settlement in Tezos Lawsuit
A Californian judge has given preliminary approval for a $25 million settlement proposed by the Tezos Foundation to end a consolidated class-action lawsuit.
The lawsuit dates back to shortly after Tezos’ $232 million initial coin offering (ICO) in July 2017, when investors started filing claims against the firm, accusing Tezos of issuing unlicensed securities in the U.S.
According to court documents from an April 30 hearing, the judge wrote, “the Court will likely be able to approve the settlement, subject to further consideration at the Settlement Hearing”. The date for the Settlement Hearing is yet to be set.
If the foundation is found liable in the suit, estimates of damages range from under $1 million to more than $150 million. The proposed $25 million settlement will provide class-action members damages equivalent to between 16%, to more than 100%, of the estimated damages.
Tezos denies any wrongdoing
The foundation denies any wrongdoing during their ICO, and wrote in a blog post they had chosen to settle out of court because lawsuits are “expensive and time-consuming” and they preferred a one-time financial cost:
“The Tezos Foundation chose to settle all claims because the Tezos Foundation believes it is in the best interest of the Tezos project and community as a whole. The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing.”
Making it hard for the SEC
The SEC has also investigated the firm in relation to their ICO but is yet to bring a case against Tezos. Should the current settlement be finalized, the SEC may find it more difficult to build a case that the Tezos Foundation has acted in bad faith.
While the lawsuits may have scared some investors away from Tezos, supporters don’t seem too worried with one Reddit user saying “it’s water under the bridge…” and another saying they were “a lot more worried about the SEC than this class-action.”
Tezos’ assets have almost tripled in value since the ICO with the Foundation’s March 9 report revealing assets in excess of $630 million.