The Financial Services Agency’s new commissioner today said that there was no need to promote cryptocurrencies—but work on CBDC is a must.
The new head of Japan’s financial watchdog today said that there should be more focus on central bank digital currencies (CBDCs) rather than the promotion of cryptocurrencies not pegged to fiat, such as Bitcoin.
Ryozo Himino, who was appointed as the new commissioner of Japan’s Financial Services Agency (FSA) last month, said deregulation of digital assets like Bitcoin may not help technical innovation in a Wednesday interview with Reuters.
He told the news agency that if deregulation increases “speculative trading,” it wouldn’t be worth it—adding that the FSA was “not thinking of taking special steps to promote cryptocurrencies.”
But Himino did praise the country’s enthusiasm for developing a CBDC. He told Reuters that the country, however, should think hard before issuing a central bank digital currency because of the potential “merits and demerits” of doing so. A central bank-issued digital currency, for example, would offer the country more flexibility in its monetary policies, though such currencies have been decried by privacy proponents as potentially overly invasive.
The new chief financial regulator added that Japan should be ready to issue a CBDC and continue research as the coronavirus pandemic could lead to a cashless society. Himino last year chaired the G20 debate on regulating cryptocurrencies.
Japan is one of many countries around the world racing towards creating a digital version of national currency controlled by a central bank.
Last month the central bank’s department director-general, Takeshi Kimura, said talks of a digital yen have moved “beyond the preparatory stage.” He added that a CBDC is a top priority for the country.
Japan faces competition from China, which is by far the most advanced country in terms of digital currency development.
According to the Bank of International Settlements, more than 80% of central banks around the world are also working on—or at least researching—CBDCs, which are thought to speed up financial transactions and be a possible cash replacement.