potential growth rate rising through an improvement in productivity as a wide range of entities continue with initiatives concerning structural reforms and growth strategies. take recent developments for instance ; namely, the output gap being positive and labor market conditions remaining considerably tight, as evidenced by the existing labor shortage. such underlying developments seem to have given rise to changes in employment practices, including increased mobility in the labor market brought about by the efficient allocation of excess labor resources from sectors with low productivity to those with high productivity. alongside this, progress in working - style reforms and other initiatives suggests a deepening awareness among both workers and managers of the need to raise productivity. pursuing structural reforms and growth strategies is not an easy task and a fairly extensive process. nonetheless, it is safe to say that the necessary conditions for a rise in productivity, which will bring about a boost in japan ’ s growth potential, gradually are being fulfilled. i believe these developments will play a role in underpinning the virtuous cycle from income to spending. specifically, a rise in productivity will act as a starting point of such cycle, stimulating price rises through increases in wages and private consumption. effects of monetary policy are not directly transmitted to economic entities — namely, individual firms and households — and thus may take time to materialize in the form of backing up their efforts. however, they should be able to support various initiatives as the bank ’ s conduct of monetary policy stimulates aggregate demand and suitably tight supply - demand conditions are maintained. therefore, with a view to achieving its price stability target and realizing sustainable economic growth in a coordinated manner, the bank needs to persistently continue with its powerful monetary easing and consistently provide support for the initiatives of a wide range of economic entities. 5 / 5 bis central bankers'speeches

market may pose considerable challenges to european regulators and supervisors in the forthcoming years. accordingly, as central bankers, we need to remain vigilant to ensure that the regulatory framework is adequate to address both current and emerging risks and challenges. at this stage, as already highlighted by the financial stability board and other international bodies, the level of interconnectedness between the traditional financial system and crypto - asset providers is low and the financial sector has not suffered large losses because of the significant correction of crypto - assets'market value or because of the defaults of some major crypto players. for this reason, we need to be proactive and stand ready to react. at european level, legislators are trying to find some answers to the challenges and risks stemming from cases like these. i am referring to micar, the regulation that introduces – for the first time – a clear set of rules to deal with crypto - assets. micar represents an important step forward in this field, although it will enter into force in the first semester of next year. in the run - up to the finalization of a european regulatory framework and also afterwards, as the new rules will obviously not cover each and every potential issue, we felt the need to provide some useful references for consumers, intermediaries, providers and operators of digital infrastructures. this is why we released a'communication on decentralized technology in finance and crypto - assets'in june. the purpose of the communication is twofold : 4 / 7 bis - central bankers'speeches 1. to draw the attention of these entities to both the opportunities and risks connected with the use of such technologies in finance and with activities and services relating to crypto - assets ; 2. to guide regulated firms in finding safeguards to mitigate the risks associated with the use of decentralized technologies and / or with crypto - assets. we want to help our financial system to seize the opportunities offered by these technologies. the bank of italy, together with two italian universities and open to any others that want to take part, has already started an initiative for developing common standards for smart contracts. this project aims at establishing a collaboration to promote standards and guidelines for smart contracts relating to the banking, financial and insurance sectors. indeed, the development of smart contracts must take into account both the technological and the regulatory component, and requires a holistic approach benefiting from contributions deriving from legal, economic and computer science perspectives. the bank of italy intends to define standards