Bank of Japan thus plays a vital role in the settlement process in Japan as a whole. Bank of Japan serves two specific functions in securing the stability and efficiency of the country’s payment and settlement systems: (1) providing the means of settlement to the public; and (2) attending to the smooth execution of payments and settlements in Japan.
As a provider of the means of settlement, the Bank issues Bank of Japan notes and ensures their smooth circulation. As I mentioned earlier, cash payments immediately complete the settlement of a transaction by delivering a means of payment directly to the counterparty.