💴 On Saturday, May 16, 2026, Bank of Japan Deputy Governor Ryozo Himino delivered a keynote titled "The Singleness of Money and the Role of the Central Bank" at the Japan Society of Monetary Economics. The speech rarely made headlines, but it is the clearest signal yet of how Japan thinks about the future of money. Here we walk through it in the order he gave it, filling in the background overseas readers need along the way.

The Bank of Japan publishes the original speech as a Japanese PDF on its website. What follows is a section-by-section walk-through, written for a reader who has not been steeped in central-bank jargon. Himino — a former head of Japan's Financial Services Agency and a former chair of the Financial Stability Board's standing committee on regulation — has a knack for pulling abstract monetary concepts back into plain language, and the speech rewards careful reading.

1. Why this speech, now: the GENIUS Act and the digital euro

Himino opened with last year's headline. In 2025, he said, "the world's monetary landscape took some big steps."

In July 2025, US President Trump signed the GENIUS Act — "Guiding and Establishing National Innovation for U.S. Stablecoins" — into law. The legislation created a federal framework for dollar-pegged payment stablecoins, requiring 100% backing in liquid assets such as US Treasuries. A presidential executive order in January 2025 had separately banned federal agencies from developing a US central bank digital currency (CBDC). The strategic logic was made explicit by Treasury Secretary Scott Bessent, who said stablecoins would "reinforce the dollar's status as the world's reserve currency, expand access to the dollar economy for billions of people around the world, and drive sharp new demand for U.S. Treasuries as stablecoin backing assets." Put plainly: if dollar stablecoins go global, the world finances the US fiscal deficit.

Europe went the other way. With the MiCA regulation already in force restricting private stablecoins, the European Central Bank in October 2025 set 2029 as the target launch date for the digital euro. ECB Executive Board member Philip Lane framed it in geopolitical terms — calling the project a way to overcome fragmentation in eurozone retail payments and reinforce Europe's "strategic autonomy" in an era of deepening geopolitical division.

Himino's summary: "The US has steered toward stablecoins, Europe toward CBDC."

He flagged this as a problem for Japan. "The US and Europe have come up with different answers, and the yen is neither a reserve currency like the dollar nor a tool of regional integration like the euro. We can't just mimic one or the other." Japan, he noted, has actually been preparing for both paths — it was first in the world to legislate a fiat-stablecoin framework in 2023, and the BOJ has been running CBDC pilot experiments. The parts are in place. What is missing, he suggested, is a coherent vision of what the whole payment system should look like.

Designing such a vision, Himino said, requires juggling technical feasibility, social cost, convenience, resilience, openness to innovation, competition policy, financial stability, anti-money-laundering, monetary policy considerations, seigniorage, and implications for the international monetary system — across both peacetime and crisis scenarios. It is, in other words, a hard problem.

One striking aside: he noted recent moves in Europe that point in the opposite direction from full digitalization. Slovakia (2023), Hungary (2025), and Slovenia (2025) have all amended their constitutions to guarantee citizens' "right to pay in cash." Switzerland did the same in March 2026, writing into its constitution that the central bank "guarantees the supply of cash." Sweden's Riksbank — the world's oldest central bank and a famous cashless pioneer — issued recommendations in March 2026 telling citizens to keep about 1,000 kronor (roughly $105) on hand for a week's worth of expenses in case digital systems fail, hold cards from multiple networks, and use cash periodically just to keep the cash system functional.

Himino, who is in his sixties, joked that he had been quietly embarrassed by his wallet stuffed with cash and cards, which puts him out of step with Japan's cashless campaigns. Reading the Riksbank document, he wondered if the old habit had "come all the way around to become the cutting edge of the new geopolitical era."

This is the framing. The rest of the speech zooms in on one angle — the singleness of money — that the BOJ thinks is closely tied to its own role.

2. The three functions of money

Before getting to the main argument, Himino took the audience back to economics 101.

Money, textbooks say, has three functions: a unit of account, a store of value, and a medium of exchange. In Japan that "unit of account" is the yen itself — an abstract unit that exists independently of any specific physical or digital form. The Bank of Japan's mission of price stability, he reminded the room, is precisely about keeping the yen reliable as a unit of account.

The store-of-value function needs concrete instruments — cash, bank deposits, bonds, stocks, mutual funds — each with its own characteristics and risks. People mix and match depending on whether they're saving for next week's groceries or for retirement.

But all of these only matter if you can actually spend them later. The store-of-value function rests, in the end, on whether the instrument can either be used directly to pay or converted into something that can. Which brings us to the third function: the medium of exchange — what payment people call settlement.

That third function is the focus of the speech.

3. So many ways to pay, yet "one" money

Here's a paradox. The ways to make a payment in Japan have multiplied dramatically: cash, bank transfers, the inter-bank instant transfer system Cotra, credit cards, smartphone payments, transit cards, prepaid cards, gift certificates, and so on. The 2025 Osaka-Kansai Expo accepted 73 different cashless payment brands inside the venue alone.

And yet, in the world of central banks, when economists talk about the "medium of exchange" they put enormous weight on something called the singleness of money. How can payment methods be exploding in variety and still be "single"?

Himino's answer: differences in convenience, fees, and points aside, all these methods share one essential property. When you complete a payment, both you and the receiver agree that a definite amount has been settled. Behind the scenes, almost every method ultimately moves money the same way — your cash or bank deposit shrinks, the recipient's bank deposit grows. Smartphone apps and cards are really just bundling up many separate bank transfers and doing them in batch.

So if you really want to understand how payments work in Japan, the place to look is a humble bank transfer. Which is exactly where Himino went next.

4. The hidden magic of a bank transfer

The thought experiment goes like this.

You have an account at Bank A. You want to send 100,000 yen (about $630 at today's rate of roughly 158 yen to the dollar) to a shop that banks with Shinkin B — a small regional cooperative bank you've never heard of.

You tap your phone. What happens?

Bank A subtracts 100,000 yen from your deposit. Bank A then instructs the Bank of Japan to subtract 100,000 yen from Bank A's reserve account at the BOJ and add 100,000 yen to Shinkin B's reserve account at the BOJ. Shinkin B finally adds 100,000 yen to the shop's account.

Why this elaborate dance? Why not just send "100,000 yen of Bank A deposits" directly to the shop?

Because, Himino explained, the shop would then have to hold deposits from countless customers' countless banks, manage them all, deal with branch coverage issues, run different apps, and — most importantly — worry about whether each issuing bank is creditworthy enough that its deposits are really worth their face value. Bank A's ordinary deposit might pay less interest than Shinkin B's. In the worst case, the bank could fail and only a portion of the deposit would be covered by deposit insurance.

A different alternative would be to set up an exchange where Bank A deposits and Shinkin B deposits could be swapped directly. But there are too many banks, the trading combinations are endless, and worst of all, the moment Bank A reports bad earnings, the 1-to-1 exchange rate could wobble. The shop would have to verify every single payment.

Bank transfers solve all of this elegantly. As long as Bank A holds enough reserves at the BOJ, Shinkin B doesn't have to worry about Bank A's creditworthiness — only whether the BOJ's reserve system itself is trustworthy. And because the settlement runs through BOJ-Net, the BOJ's own infrastructure, it's operationally certain too.

This is what makes the singleness of money work. The BOJ, the FSA, and the Deposit Insurance Corporation of Japan together impose regulation, supervision, lender-of-last-resort facilities, and deposit insurance on commercial banks — paying significant social costs to make sure that a bank deposit is reliable both as a store of value and as a medium of exchange. On top of that, the BOJ's settlement function makes deposits at different banks exchange 1-to-1 every day, without question. The repetition is what builds the public's confidence that this is, in fact, a single currency.

5. What's different about paying with a stablecoin

Now run the same exercise with stablecoins.

Suppose Company C issues a yen-pegged stablecoin called C-coin, and Company D issues a D-coin. (Under the new US framework, these would be backed only by highly liquid, low-risk assets, so in one sense the backing is more uniform between stablecoins than between deposits.) But here is the catch, Himino observed: a stablecoin payment doesn't pass through the BOJ's settlement function. Even smartphone-app payments eventually settle through bank transfers, where the BOJ steps in. Stablecoins are different.

How does the payment between you and the shop play out? Himino sketched three patterns.

Single-coin pattern. You and the shop both use only C-coin, the most established option. You send 100,000 yen worth of C-coin from your wallet to the shop's wallet. Clean.

Swap-then-pay pattern. The shop only accepts D-coin. You convert your C-coin into D-coin on an exchange, then send the D-coin.

Multi-coin accept pattern. The shop accepts both. You send C-coin. The shop holds a mix of coins and either keeps them as-is or eventually consolidates them into D-coin.

The trouble, Himino explained, is that the swap-then-pay and multi-coin patterns are not guaranteed to work smoothly. Even if both C-coin and D-coin are properly backed and regulated, a piece of bad news — C's earnings deteriorate, C suffers a cyberattack, fraud is uncovered — could push the exchange rate away from 1-to-1, at least temporarily. Even if you still want to use C-coin, more shops might insist on D-coin. Payment networks have powerful self-reinforcing dynamics: once a critical mass of people expects C-coin to be rejected, the prediction fulfills itself.

The single-coin pattern, where one stablecoin dominates and stays dominant the way certain social networks do, could in principle preserve singleness. But that creates a different problem: a single private company controlling the core economic infrastructure. "At a minimum," Himino said, "such a company would need governance comparable to that of a central bank."

The critique here is not "stablecoins are bad." It is more specific: the singleness we currently take for granted is not automatic. Different system designs preserve it to different degrees, and the cost of getting it wrong tends to show up only in a crisis.

6. How strict does singleness have to be?

How perfect must singleness be? Even monetary economists disagree.

The Bank for International Settlements — the central bank for central banks — takes the strict view. Drawing on Nobel laureate Bengt Holmström's vocabulary, BIS reports argue that money must be "information-insensitive": accepted "no questions asked," with no room for even tiny doubts about face value. The reason is contagion. Once doubt creeps in, adverse selection can cascade across the whole system. If every transaction required you to verify what's backing your payment instrument, the economy would grind down.

The Swiss National Bank's researchers Severin Bernhard and Philipp Haene have pushed back. In real life, they note, payments already involve fees and frictions. ATM withdrawals cost money. Pay 1,000 yen by credit card and the merchant receives perhaps 970 or 980. Japan has a thriving market for gift cards and regional currencies that trade at discounts in specialty shops. Users may even prefer a stablecoin with small price wobbles if it avoids large explicit fees.

Some stablecoins, Himino added, experienced sharp price swings during the 2022 collapse of FTX and the 2023 failure of Silicon Valley Bank — and yet their use kept expanding. Users in crypto trading, dollar-holding outside the US, and cross-border remittances apparently find benefits that outweigh the volatility risk. (Some of those "benefits," he noted dryly, include avoiding KYC requirements — which is its own problem.)

Bernhard and Haene also point out that many real-world payment instruments — gift cards, regional currencies — don't have strict singleness, and that's fine because their users have appropriately calibrated expectations. A niche instrument used by a small group for a narrow purpose can get away with looser singleness.

The hard question, Himino flagged, is what threshold to set once stablecoins are no longer a niche tool but a mainstream payment rail used by ordinary people. At that point, stablecoins would be deeply integrated into the broader payment system, with large flows back and forth between bank deposits and stablecoins. Maintaining singleness under stress would matter — and the social cost of achieving it (capital requirements, supervision, liquidity backstops) hasn't been seriously priced. This, he said, needs deeper thinking.

7. The future of payments — and the "third way"

Stablecoins versus CBDC is not the only menu, Himino emphasized. There are at least two other tracks already in motion.

One is straightforward modernization: keep the existing bank-transfer skeleton intact but add high-end features like real-time settlement. A Japanese study group on the future of the payment system reported on exactly this in March 2026.

The other, more radical option is what Himino described in detail. Take the existing two-tier architecture — your bank, plus the BOJ settling between banks — and migrate both layers onto a blockchain. Your bank deposit becomes a "tokenized deposit": a programmable claim on your bank, still backed by the bank itself and still protected by deposit insurance, but now living on a distributed ledger. The reserves banks hold at the BOJ to settle with each other become "tokenized central bank reserves": the same yen on the BOJ's balance sheet, now also expressed on the blockchain.

Bundle the four steps of a bank transfer into a single smart contract that executes atomically — all four happen together or none happens — and you get the best of several worlds at once. The singleness of money is preserved exactly as it is today. Programmability becomes possible. Smart contracts become possible. Tokenized assets and the cash that pays for them can settle simultaneously — the long-sought goal known as DvP (delivery versus payment).

Himino confirmed that the BOJ is already running an internal "sandbox project" to test whether central bank reserves can operate on blockchain-based systems, and that this could feed into the architecture above. Japan is also one of seven central banks participating in Project Agorá — a BIS initiative trying this design out for wholesale cross-border payments, with the New York Fed, the ECB (via the Bank of France), the Bank of England, the Swiss National Bank, the Bank of Korea, and the Bank of Mexico as the other six participants.

This is the "third way" in practice. Not stablecoins. Not a retail CBDC. A modernization of the existing plumbing that keeps the BOJ at the center while adding programmability on top.

What does the BOJ think the ideal monetary system looks like?

If you've followed this far, the answer that emerges from the speech is clearer than the headlines suggest.

The BOJ is not, at heart, neutral between the choices. Himino did not endorse a specific design, but the speech's center of gravity is unmistakable. The singleness of money is treated as a property worth defending almost above all else — not because it sounds nice, but because it is the foundation that lets ordinary people, businesses, and shops accept payments without having to verify anything, every single time. Once that property frays, the entire payment system gets noisier and more expensive in ways that show up only in a crisis.

That logic colors how the speech evaluates the alternatives.

Private stablecoins, even well-regulated ones, run into trouble at scale because their singleness depends on exchange rates between coins that can wobble under stress. The single-coin scenario where one stablecoin dominates everything has the opposite problem: a private company would end up running core economic infrastructure, and Himino was explicit that such a firm would need central-bank-grade governance.

A retail CBDC could in principle preserve singleness, but it has its own questions — would ordinary people actually find it appealing enough to use in normal times? China recently switched its digital yuan to a commercial-bank-deposit model with interest, suggesting the design challenge is real.

The tokenized two-tier design — where commercial bank deposits and BOJ reserves both live on a blockchain — preserves singleness exactly because it keeps the BOJ's settlement function at the heart of the system. The BOJ is doing the same job it does today, just on different rails. From a singleness-of-money perspective, this is the cleanest of the available options.

So the BOJ's center of gravity, read between the lines, looks something like this: the existing two-tier monetary system, kept intact, with the singleness of money treated as something close to sacred, while programmability and modern features are added on top using blockchain — and cash, for the geopolitical reasons Himino raised, remains a guaranteed fallback.

Himino did not call this a final answer. He repeatedly said his goal was to surface a question that gets forgotten precisely when everything is working — what do we actually want money to be? — and to invite the audience's views. But on the question the user asked at the start, the answer "Beyond CBDCs and stablecoins, what does the BOJ think the ideal monetary system looks like?", his speech gives a fairly definite shape: the system we already have, modernized but not replaced, with the singleness of money as its non-negotiable core.

What's it like in your country?

If you live in a country where the choice between cash, credit cards, and crypto wallets feels obvious, has anything happened recently that made you reconsider? Are your national leaders publicly debating a digital version of your currency? Would you trust a central-bank-issued digital coin more than a private stablecoin — or less? We'd love to hear what the debate looks like from where you are.

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