I doubt people will use it unless they want to be tracked. I am sure people will prefer bitcoin where government has no control. Unless they said J-coin is the only coin being accepted there but then the global market won't recognize it
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Perhaps, only time will tell. The idea is to make it consistent with the Japanese Yen, tradeable 1 to 1. So anything that you can pay your taxes in will probably have the edge. The majority of people I find are definitely not interested in breaking the law if that scenario you mention does unfold