Ryozo Himino, the newest commissioner of Japan’s Financial Services Agency, says the country will be cautious in its approach to private cryptocurrencies.
According to Reuters, Himino said that deregulating crypto would not lead to technical innovation. Rather it could promote more speculative trading, and that the government should instead focus on introducing central bank digital currencies (CBDCs), as the Covid-19 pandemic is accelerating the transition to a cashless society.
Himino took the helm of the Financial Services Agency in July, replacing Toshihide Endo, a move that was welcomed by many in crypto circles. This is due to his spearheading of last year’s G20 debate on cryptocurrency regulation, and the perception of his proactive and crypto-friendly approach.
This, however, is the first sign of how Himino may actually work in practice.
“We’re not thinking of taking special steps to promote cryptocurrencies,” he said. Instead, he spent a good deal of his time with reporters discussing CBDCs.
The Momentum Behind CBDCs Is Growing
Himino welcomed the Bank of Japan’s recent efforts to speed up research on CBDCs. He also noted the need to take practical steps now, and worry about all the challenges later,
We shouldn’t be worrying about various challenges without even trying to design a plan [for issuing CBDCs].
In the end, Japan must think really hard about whether to issue CBDCs because there are merits and demerits to doing so. What it can do now is to be ready so that when Japan decides to issue CBDCs, it can do so straight away.
Japan is far from alone in its CBDC plans. Central banks worldwide intend to launch their own national digital currencies. The Covid-19 pandemic has created a deluge of safe-haven flows into digital and hard assets.
The Coronavirus Is Accelerating Change
As the pandemic has sped up the shift away from banknotes, central banks must come up with a response. Between the introduction of Facebook’s Libra digital currency and China’s proposed digital yuan, what happens now could influence global finance for decades.
There is a huge amount at stake, none the least of which is global financial stability and the control of information. The Philippine central bank has become the latest to create a committee to look at the feasibility and policy implications of issuing its own digital currency. Many others are further along in the process.
As reported by BeinCrypto, China’s experimental digital currency is on trial in a number of cities. In Sweden, the central bank recently announced the launch of a year-long pilot of its proposed e-krona. And in the last few weeks, perhaps most notably, Lithuania issued the world’s first state-backed digital collectible coin.