Bank of Japan Governor Haruhiko Kuroda said in his speech at the symposium for the 35th anniversary of the Center for Financial Industry Information Systems that Global Stablecoins (GSCs), may offer convenient payment
services to many users, if legal certainty and technical stability are ensured.
The governor also reiterated that “legal, regulatory, oversight challenges and associated risks are adequately addressed”, as pointed out in G7 report. He said that it is important for the authorities throughout the world to join hands and maintain financial stability with free capital mobility.
He also said that spread of Global Stablecoins could have significant implications on the financial system and the transmission of monetary policy, according to a text of his speech posted on the BOJ’s website.
During his speech Kuroda addressed the challenges posed by private Global Stablecoins and CBDCs. He concluded that at present there is no reason to issue a CBDC in Japan:
The Bank of Japan currently promotes private digital currencies, and while the central bank governor does not see a reason to issue its own digital currency, he admits that “there is a wide variety of private digital money denominated in Japanese yen.” The bank encourages the use of such private digital currencies and their improvement, aiming to make their features closer to what is expected from a CBDC.
One strategy that the bank is adopting to promote such systems is increasing the number of cashless payment users and ensuring interoperability among multiple payment service providers. In October, the institution has introduced a point reward program for customers using cashless payments to improve the productivity of relevant businesses.
Payments Innovations and the Role of Central Banks: Addressing Challenges Posed by Stablecoins
Speech at the Symposium for the 35th Anniversary of the Center for Financial Industry Information Systems
Haruhiko Kuroda
Governor of the Bank of Japan
December 4, 2019
"Today, I would firstly like to discuss the public authorities' response to GSCs in terms of "global governance" in ensuring the stability of the global financial system. To maintain the global financial stability with free capital mobility, the authorities need to cooperate to
establish globally consistent rules and regulations and require issuers of GSCs to comply with these rules. It is important to understand what impact GSCs could have on a supply channel for a global public good, "financial stability."
I would then like to mention the challenges in improving the existing retail payment services. The emergence of private sector innovations, including GSCs, highlights shortcomings in the existing payment systems. For example, cross-border payments remain slow and expensive. The authorities should not only highlight risks and issues posed by the emergence of new digital money, but also encourage improvement of the existing payment systems. As mentioned earlier, while new means of payment have emerged and have demonstrated efforts to enhance customer convenience in Japan, there remain various challenges toward the wider use of cashless payments. In this regard, today, I would like to focus on the interoperability of payment services."
Full Speech At:
https://www.boj.or.jp/en/announcements/press/koen_2019/data/ko191204a.pdf