BOJ’s Ryozo Himino Warns a U.S.–Europe Digital Money Divide Could Break the ‘Singleness of Money’

The Bank of Japan is warning that the global monetary system could fracture if major economies build incompatible digital money frameworks.

Deputy Governor Ryozo Himino cautioned that the United States and Europe are moving in different directions: the U.S. is promoting privately issued dollar stablecoins, while the European Central Bank is pursuing a central bank digital currency (CBDC) in the form of a digital euro. Without coordination, this divergence could weaken the principle economists call the “singleness of money.”

That concept—long central to modern financial systems—means different forms of money should always trade at equal value and remain seamlessly interchangeable.

The Warning: Two Digital Money Paths Emerging

Himino highlighted a growing policy divergence between the world’s largest financial blocs.

In the United States, policymakers have taken steps that promote regulated stablecoins while federal agencies have been barred from issuing a CBDC. The goal is widely viewed as reinforcing the global role of the U.S. dollar through private digital tokens.

Europe is moving in the opposite direction. The European Central Bank is developing a digital euro, a retail CBDC intended to modernize payments and reduce fragmentation within Europe’s payment systems.

Both initiatives represent major redesigns of monetary infrastructure. But if they evolve separately—with different legal frameworks, technologies, and settlement systems—the result could be a patchwork global system.

Why the ‘Singleness of Money’ Matters

Central banks historically ensure that various forms of money—cash, bank deposits, and reserves—are interchangeable at par value.

Himino warned that the rise of multiple digital money formats could challenge that stability. If stablecoins, CBDCs, and other tokenized assets operate on separate infrastructures or regulatory regimes, financial markets might begin treating them as distinct and potentially competing monetary instruments.

That would undermine the “singleness of money,” the principle that maintains trust and smooth functioning in modern payment systems. When money fragments, payment networks, settlement systems, and liquidity pools can become less interoperable, potentially increasing financial instability.

Japan’s Call for a “Holistic Approach”

Rather than treating the future of money as a binary contest between stablecoins and CBDCs, Himino argued policymakers should consider a broader range of designs for digital financial infrastructure.

Japan’s strategy reflects that philosophy.

The Bank of Japan is expanding its work beyond a single digital currency model and examining multiple forms of tokenized money that could coexist while preserving financial stability.

The Alternatives Japan Is Testing

Tokenized Bank Deposits

One idea under study is tokenized deposits—digital representations of commercial bank deposits issued on programmable platforms. These could combine the reliability of traditional bank money with the speed and automation features of blockchain-style networks.

Tokenized Central Bank Reserves

The BOJ is also exploring tokenized versions of central bank reserves, the balances commercial banks hold at the central bank. These could potentially enable faster and more programmable settlement between financial institutions.

Blockchain-Based Settlement Experiments

Japan has begun testing distributed-ledger infrastructure for reserve settlement. These experiments place central bank reserve balances on a blockchain-style test environment to examine settlement mechanics and integration with existing financial systems.

The goal is to determine whether tokenized infrastructure can improve efficiency while maintaining the legal finality and operational safety of traditional central bank systems.

A Middle Path for the Future Monetary System

Japan’s approach effectively positions the country between the U.S. and European strategies.

Rather than committing exclusively to privately issued stablecoins or a retail CBDC, the BOJ is examining a mix of public and private digital money formats—including CBDCs, stablecoins, tokenized deposits, and tokenized reserves.

Himino’s broader message is that the architecture of digital money is still being designed. Decisions made now—by governments, central banks, and regulators—could determine whether the future monetary system remains unified or evolves into a fragmented network of competing digital currencies.

Maintaining the singleness of money, he argued, should remain the central objective as that system evolves.