Himino: Digital money needs holistic system design
Bank of Japan Deputy Governor Himino emphasized the need for a holistic design of future monetary systems, focusing on the concept of 'singleness of money'. He delivered a speech at the Japan Society of Monetary Economics on May 16, 2026.
Divergent paths for digital currencies
Himino highlighted the divergent approaches taken by the United States and Europe in 2025 regarding digital money.
The US enacted the GENIUS Act to regulate stablecoins and prohibited federal agencies from issuing CBDCs, with Treasury Secretary Scott Bessent stating stablecoins would "buttress the dollar's status as the global reserve currency.
" Conversely, the ECB announced plans for a digital euro by 2029, with Executive Board Member Philip Lane citing benefits like overcoming payment fragmentation and strengthening Europe's strategic autonomy.
Himino noted that Japan, a pioneer in stablecoin legislation and advancing its CBDC pilot, is prepared for both paths but sees a need for a holistic system design beyond mere component work, given the lack of global consensus and the yen's different international role.
Beyond technology: Systemic design needs
Designing a future monetary system requires considering technical feasibility, social costs, user convenience, resilience, financial stability, and monetary policy implications.
Himino pointed out trade-offs, such as stablecoin business models struggling under zero interest rates or CBDCs finding it difficult to attract users in unstressed conditions.
He cited Sweden's Riksbank recommendations for public payment preparedness, which advise citizens to hold cash and have multiple payment methods for resilience in crises.
Himino also noted that several countries, including Slovakia, Hungary, Slovenia, and Switzerland, have recently enshrined the right to pay with cash or the central bank's provision of cash into their constitutions, reflecting a renewed focus on cash's role in geopolitical tensions.
Cash's geopolitical comeback
Deputy Governor Himino's personal reflections highlight a growing skepticism towards purely digital solutions, particularly regarding resilience.
His 'fat wallet' anecdote underscores the renewed importance of physical cash for national preparedness in an era of geopolitical tensions.
This perspective suggests a deeper re-evaluation of monetary fundamentals, emphasizing the need to preserve core functions of money beyond mere technological convenience.