various entities beyond geographical limitations. the digital world, although not something that is peculiar to metaverse, has the potential to create new combinations of businesses and consumers. as consumers will be able to access a variety of businesses without being limited by where they live, they will find it easier to receive the services that best meet their needs. such an environment will incentivize businesses to design and launch brand - new, superior services. as businesses whose activities were once limited by geographical conditions are now able to access a broader market, they are also more likely to be able to commercialize services which meet the niche demands of consumers, thereby providing consumers with more choices. such a possibility is also the case for financial services — a greater variety of financial services will be provided to more people through digital channels. for example, some firms have already 1 / 3 bis central bankers'speeches launched internet - based multilingual remittance services for foreigners working or studying in japan. as a decline in japan ’ s population is anticipated going forward, especially in nonmetropolitan areas, there will be a growing need for digital technology as a means of providing financial services in underpopulated areas. one thing to keep in mind is that it is difficult, nor is it right, for all financial businesses to provide homogeneous digital services to consumers. there is no homogeneity in the ability of businesses to offer digital services, nor in the degree to which consumers accept digital services. in addition, consumers are not homogeneous in what they look for in services. we can expect to see more and more new combinations of consumers that actively use digital services and businesses that cater to their diverse needs. that being said, it is also important there are businesses that offer services tailored to the needs of consumers that prefer non - digital services. by strengthening the combination of consumers and businesses through digital channels, our society as a whole should not overlook various potential needs. this in turn is likely to lead to an increase in the japanese economy ’ s growth potential. it is essential to have global perspectives in advancing digital services. it is a good thing that businesses provide finely - tuned services for the specific needs of domestic customers. however, potential business areas may not be expandable if services are optimized to be competitive only in the japanese market without taking into account global technical and societal trends — this is the so - called galapagos syndrome. this would make it difficult for businesses to improve services by incorporating global trends or to evolve services

data coupling, the greater the network effects, thereby increasing benefits at an accelerated rate. while this in itself could yield large benefits to consumers, it could also cause new problems associated with monopolies or oligopolies, where one or a few entities have too strong a domination over data. we need to be aware that data monopoly can inhibit competition and innovation, and ultimately have a negative impact on consumer benefits. closing remarks finally, in the remaining time, i would like to touch upon central bank digital currency ( cbdc ). after the release of “ the bank of japan ’ s approach to central bank digital currency ” in october 2020, the bank of japan carried out proof of concept ( poc ) phase 1 from april 2021 to conduct experiments on the basic functions that are core to cbdc as a payment instrument. completing phase 1 as planned, next month we will move on to poc phase 2 in order to test the additional functions of cbdc. while there is no change in the bank ’ s stance that it currently has no plan to issue cbdc, we consider it important to prepare thoroughly to respond to changes in circumstances in an appropriate manner, from the viewpoint of ensuring the stability and efficiency of the overall payment and settlement systems. amid various new combinations that are being created in an increasingly digitalized society, the bank will continue to carefully consider the expected roles of central bank money for people ’ s lives today and in the future, drawing on the wisdom of various stakeholders both at home and abroad. i would like to close my remarks by expressing my hope that interactions between the participants at this year ’ s fin / sum will lead to many new combinations. thank you for your attention. 3 / 3 bis central bankers'speeches