Bank of Japan official: Bitcoin and fintech won’t threaten central banks

Announcements | October 7, 2016 By:

Hiromi Yamaoka, head of the Bank of Japan’s payment and settlement systems department, has stated that bitcoin and other fintech innovation won’t topple hard money printed by central banks any time soon, particularly in countries such as Japan with a solid, established financial infrastructure.

But the need for central banks to maintain public trust in their policies has increased as the evolution of financial technology – or “fintech” – gives the public an alternative to using cash, Yamaoka told Reuters.

Bank of Japan established its own fintech department in April 2016 to offer guidance to the country’s banks, he says, and while there are no plans to experiment with new technology like blockchain, fintech is an area that could potentially “revitalise” Japan’s economy.

New technology, Yamaoka states, is a boon for companies struggling to maintain the costs of branches and ATMs. The Japanese public still by and large trust their financial institutions, which went largely unaffected by the 2008 crisis, meaning that fintechs should attempt to cooperate with them, rather than disrupt them.

“In a country like Japan, where the public has confidence over the banking system, it’s important to create an environment where banks and start-ups work together,” Yamaoka said “One of the trends of fintech is the possibility of providing financial services by smart-phones without any ‘brick and stone’ infrastructure. In that trend, the heavy infrastructure of ATMs and branches means it’s difficult to gain a competitive advantage [without digital benefits].”