Lead

On 16 May, Bank of Japan Deputy Governor Ryozo Himino delivered a speech in Tokyo calling for a unified monetary framework that treats central bank money, bank deposits, stablecoins and tokenised deposits as interchangeable parts of one system. Himino warned that the rapid rise of private digital money could fragment the monetary system and threaten financial stability if not overseen in a coordinated way.

Background

Japan has already established a regulatory regime for stablecoins that requires full fiat backing and is piloting a central bank digital currency (CBDC). The BOJ’s new proposal builds on these measures, arguing that all forms of money should be convertible at face value without friction—a principle Himino calls the “singleness of money.”

Stablecoins, digital tokens pegged to a fiat currency, have grown worldwide, while tokenised deposits—blockchain representations of traditional bank deposits—are emerging as a new financial product. Both fall outside the traditional regulatory scope of central banks, creating potential gaps in oversight.

What Happened

During his address at the Japan Society of Monetary Economics, Himino outlined a holistic policy framework that would integrate monetary policy, financial stability oversight, payments regulation and cultural aspects into a single agenda. He emphasised that the BOJ is not seeking to ban private digital money; instead, he proposed that stablecoins and tokenised deposits could exist and thrive only if they maintain full convertibility with central‑bank money.

Himino noted that Japan already requires stablecoins to be fully backed by fiat currency, and that the CBDC pilot is part of a broader strategy to keep all digital money tethered to central‑bank liabilities. He warned that if a stablecoin cannot be converted into yen at par, the monetary system could “crack” into incompatible silos.

Market & Industry Implications

For the stablecoin industry, the BOJ’s stance signals a regulatory environment that favours compliant issuers. Projects that operate with opaque reserves or resist oversight would find no support under Himino’s framework. The emphasis on full fiat backing and interoperability with central‑bank money sets a high bar for entrants.

Tokenised deposits, which allow commercial banks to issue blockchain‑based representations of traditional deposits, receive a green light under the proposed framework, provided they remain convertible to central‑bank money at par. This could encourage banks to explore tokenised products while maintaining regulatory compliance.

The BOJ’s call for a single‑money system could influence other jurisdictions to adopt similar integrated frameworks, potentially leading to greater global coordination on digital‑money regulation.

What to Watch

  • Ongoing developments in Japan’s CBDC pilot programme and any updates to its regulatory architecture.
  • Future BOJ statements or policy documents that detail the implementation of the “singleness of money” framework.
  • Regulatory actions or guidance issued to stablecoin issuers and tokenised‑deposit providers in Japan.