While talking about digital currencies, the Governor also showcased disinterest, even on the subject of stablecoins. According to Kurado, stablecoins should not be issued unless there is a sufficient framework in place to govern it and manage risks emerging from the tech. Kuroda told the Japanese parliament,
“If stable coins backed by companies with a huge customer base are issued globally, that could have an impact on monetary policy and financial system stability.”
Japan has been firm on its stance with regards to crypto as the central bank of the country had previously raised similar concerns related to digital assets. The Deputy Governor of the BoJ, Masayoshi Amamiya, had previously commented on the issuance of a central bank digital currency, stating that it could “erode commercial banks’ credit channels.” Amamiya added,
“If central bank digital currencies replace private deposits, that could erode commercial banks’ credit channels and have a negative impact on the economy.”
In June, when Facebook had announced Libra, the Deputy Governor had said that it must comply with regulations on money laundering and risk management. He had also asked the central bank to be vigilant to the impact Libra could have on the country’s banking and settlement systems.
While Japan continues to warn people about crypto, other Asian nations like China and North Korea are developing their own cryptocurrencies. North Korea is reported to be in the early stages of developing its own cryptocurrency, like Bitcoin, to side-step international sanctions.