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Digital financial services have spread dramatically in the
Asia-Pacific region as many people living in emerging nations,
who still do not have access to face-to-face financial services,
jumped at the convenience of smartphones to make daily payments.
While such developments enhance financial inclusion, they also
heighten the need for policymakers to manage cyber-security
risks and enhance anti-money laundering regulation, Ueda said.
"Crypto assets, tokenization, artificial intelligence (AI), and
other new technologies may bring opportunities, but they could
also pose risks to the financial system," Ueda said in a keynote
speech to the Asia-Pacific high-level meeting on bank
supervision.
"A critical challenge for financial authorities lies in
harnessing the advantages of the digitalization of finance while
effectively managing risks to ensure the stability of the
financial system," he said.
As financial services and providers continue to diversify,
adopting the principle of applying equal regulation for the same
type of financial activity and risk is increasingly important,
Ueda said.
"However, a practical challenge persists in determining which
activities and risks should be classified as 'the same' under
this principle," he added.
(Reporting by Leika Kihara; Editing by Christian Schmollinger)
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