Ryozo Himino, the new commissioner of Japan's Financial Services Agency, says the agency is wary of deregulating private cryptocurrencies.

Noting that the COVID-19 pandemic could accelerate the transition to a cashless society, Himono instead emphasized the potential role of central bank digital currencies (CBDC) to spearhead innovation in digital payments.

“Deregulating Bitcoins and other cryptocurrencies may not necessarily promote technical innovation, if doing so simply increases speculative trading,” he told reporters on Aug. 5.

Japan should think "really hard" about whether to issue a CBDC

Himono — whose proactive engagement with cryptocurrencies has been welcomed by voices in the industry — resisted the idea that the FSA would move in the direction of deregulating the market.

“We’re not thinking of taking special steps to promote cryptocurrencies,” he said.

The commissioner, who replaced his predecessor Toshihide Endo last month, spoke positively about the Bank of Japan's recent move to accelerate research into CBDCs. 

“Worrying about various challenges” associated with CBDC issuance should not eclipse “trying to design a plan,” he said, adding:

“In the end, Japan must think really hard about whether to issue CBDCs because there are merits and demerits to doing so. What it can do now is to be ready so that when Japan decides to issue CBDCs, it can do so straight away.” 

As previously reported by Cointelegraph, Himono was instrumental in the FSA’s decision to invite Blockstream`s Adam Back to a seminar in June 2019 held along with G20 Fukuoka, Japan. At the seminar, various stakeholders convened at the G20 to discuss the potential of blockchain to construct decentralized financial systems. 

In fall of 2019, Himono had characterized Facebook’s proposal to launch a stablecoin as “a ringing alarm clock to us all,” calling for more control over transformations in the economic system in order to prevent innovations from resulting “ in a runaway disorder.”

Japan and the international momentum behind CBDCs

This January, the Bank of Japan joined central banks from the United Kingdom, European Union, Sweden and Switzerland in a collaborative study of potential use cases for CBDCS in their respective jurisdictions. 

Later that month, the BoJ’s deputy governor said the institution must be “prepared to respond” to any potential surge in public demand for issuing a CBDC.

China has meanwhile proceeded apace with its own digital yuan, details of which continue to draw significant media attention.