Bank of Japan’s Himino Calls for Wider Approach to Global Monetary System
Bank of Japan Deputy Governor Ryozo Himino on Saturday called for a broader approach to designing the future global monetary system, arguing that options should not be confined to central bank digital currencies and stablecoins. He made the remarks in a speech at the annual meeting of the Japan Society for Monetary Economics in Tokyo. MarketScreener
The US prohibits the issuance of CBDCs and promotes stablecoins as a means to strengthen the dollar’s position as the world’s primary reserve currency, while Europe is advancing a digital euro intended to overcome regional fragmentation in retail payment systems. Against that split, Himino argued that neither approach alone is adequate for what the global financial system requires. MarketScreener
A Wider Menu of Options
“Options for the future monetary system are not limited to CBDCs and stablecoins,” Himino said, pointing to alternatives such as tokenised bank deposits and central bank reserves operating on blockchain infrastructure. MarketScreener
He said developments overseas show that a more comprehensive design is needed for the future monetary system — one that weighs technical feasibility, social costs, user convenience, financial stability, and monetary policy together. Taking any single variable in isolation, he suggested, risks producing a system that serves some purposes while failing others. MarketScreener
“Japan is prepared for both paths,” Himino said, describing the country as a pioneer in stablecoin legislation that has simultaneously advanced a pilot programme for a CBDC. MarketScreener
The BOJ’s Sandbox Project
The BOJ has begun a “sandbox project” to explore the technical feasibility of tokenising its reserves and using them for blockchain-based payment solutions, Himino said. This is a departure from the more familiar CBDC discussions that have dominated central bank debates globally for several years. MarketScreener
The BOJ manages interbank settlement, liquidity, and monetary policy through commercial banks’ reserve accounts held at the central bank. Introducing blockchain technology to settle such reserves would allow scope for instant settlement 24 hours a day and reduce gridlock risk during stress events, analysts have said. MarketScreener
The sandbox initiative puts Japan in a distinct position. Rather than committing fully to either the US or European model, Tokyo is stress-testing the underlying infrastructure of its own central bank balance sheet.
Japan’s Dual-Track Strategy
The BOJ began experiments for issuing a CBDC in 2021. While no decision has been made on whether to issue such a currency, the central bank started a pilot programme in 2023 for a retail CBDC that would be distributed via private banks or payment firms. MarketScreener
Japan’s government has also supported a project by major domestic banks to issue stablecoins that will be tested for use in cross-border payments. These two tracks, running at the same time, reflect the deliberate ambiguity Himino described in his remarks: Japan is not foreclosing on any route. MarketScreener
That dual posture carries geopolitical weight. As the US and Europe pursue sharply different visions for the monetary architecture of the digital age, a G7 economy like Japan occupying a position of deliberate openness places it as a potential bridge — or at minimum, a model for smaller economies watching the debate unfold.
Regional and Global Impact
The divergence Himino described between Washington and Brussels is not just technical. The US promotion of stablecoins is explicitly tied, according to Reuters, to reinforcing dollar primacy. Europe’s digital euro project is driven by concerns about payment sovereignty. Japan’s refusal to align entirely with either camp, as Himino framed it on Saturday, positions the BOJ as an advocate for a more pluralistic framework.
The BOJ’s sandbox project exploring tokenised central bank reserves on blockchain platforms, if successful, could offer a third model: one that upgrades existing central bank infrastructure without requiring a full replacement of the current system. That approach may appeal to economies hesitant to adopt US stablecoins or enter the EU’s regulatory orbit. MarketScreener
For cross-border payments specifically, the stakes are high. Existing correspondent banking infrastructure is slow, costly, and opaque. Blockchain-settled central bank reserves operating around the clock would address each of those friction points, as analysts have noted.
Background
The global debate over digital currency architectures has intensified since 2021, when governments and central banks began moving from concept to pilot. The US posture shifted under the current administration, which banned CBDC issuance and positioned dollar-denominated stablecoins as the preferred instrument for preserving American financial influence. The EU has moved in the opposite direction, advancing a digital euro through its central institutions. Japan enacted stablecoin legislation in 2022, one of the first major economies to do so, and the BOJ launched its retail CBDC pilot programme in 2023. The BOJ’s policy rate currently sits at 0.75 percent, according to its April 28 statement, as it continues a gradual exit from ultra-loose monetary settings.
What Happens Next
The BOJ’s sandbox project on tokenised reserves is ongoing, and Himino indicated no decision has been reached on whether Japan will ultimately issue a retail CBDC. The central bank’s retail CBDC pilot, begun in 2023, continues to run through private bank and payment firm distribution channels. Japan’s major domestic banks are also advancing their stablecoin project, which will be tested for cross-border payment applications. No formal timeline for any final policy decision on digital currency issuance has been set by the BOJ or the Japanese government. MarketScreener
