Provisional Translation

Q.

Yesterday a government panel of experts issued its recommendations concerning the issues at the Shoko Chukin Bank. The recommendations includes reducing crisis-response loans and establishing a third-party commission to oversee its operations. Minister, what do you think about them?

A.

The Shoko Chukin Bank is under the jurisdiction of three different ministries and agencies: The Ministry of Economy, Trade and Industry, the Financial Services Agency, and the Ministry of Finance, and regarding this problem, in response to the recommendations, the Bank should focus on supporting small and medium enterprises to resolve their issues such as business improvement, business turnaround and business succession under the cooperation and collaboration with regional financial institutions while rebuilding the trust with them. It’s important for the Bank to focus on that in order to improve regional enterprises’ productivity and also to establish their business model that contributes to regional economy. Regarding things like governance to ensure that happens, I think we’re going to have to work with the relevant ministries and agencies to follow up on the Bank’s progress, so I think we’re entering a very important phase.

Q.

I’d like to ask a question about cryptocurrencies. Yesterday South Korea said that it was preparing to ban the trading of cryptocurrencies on exchanges, while in China the authorities stop ‘mining’. In April last year, with the amendment of the Payment Services Act, Japan became the first country in the world to introduce rules, but the rest of Asia is currently going in the opposite direction. Could you tell us your views on this?

A.

In Japan, as you point out, so-called virtual currency broker dealers have been required to register since last year, and I think this measure was introduced as a way of protecting investors and tackling money laundering. There have been various incidences of trouble and opinions often remain divided about how to ensure the business is conducted properly and what is going to happen with these cryptocurrencies in the future. So in that sense, when considering the future of innovation in this sector, and what should be done about this or that, it’s going to be really difficult to strike a right balance between investor protections and innovations, so we’re going to have to be cautious. Cryptocurrencies have become really popular in countries where there’s not much confidence in cash. A lot of things are being said about them, but I have no comment on that. We still can’t really see how these sorts of markets are going to evolve in the future and what sort of a system could replace legal tenders. I don’t think it’s a good idea to regulate everything, so I think a right balance between investor protections and innovations should be struck in these areas.