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"It's too far off," Hiromi Yamaoka, head of the BOJ's payment
and settlement systems department, said on the sidelines of a
forum on financial innovation hosted by Thomson Reuters.
"It would change the banking system too drastically."
Japan has become a front runner in the financial technology (fintech)
industry, with the government this year having recognized
bitcoin as legal tender and approved several companies as
operators of cryptocurrency exchanges.
The BOJ last year set up a section in charge of fintech to offer
guidance to banks seeking new business opportunities, and joined
up with the European Central Bank to study distributed ledger
technology (DLT) like blockchain.
But the BOJ and ECB said in September they had judged that
blockchain – which is best known as the system underpinning
bitcoin - was not mature enough to power the world’s biggest
payment systems.
"From a practical perspective, I think this is still 'under
construction'," Yamaoka told the forum, referring to blockchain
and DLT technology.
He said the hype surrounding initial coin offerings was "quite
tremendous".
Blockchain is a public online ledger of transactions maintained
by a network of computers on the internet.
Financial firms hope the nascent technology can reduce the cost
and complexity of burdensome processes such as international
payments and securities settlement.
Banks are also using fintech in other ways to make their
financial services more efficient, including smartphone apps and
artificial intelligence for advisory services.
(Reporting by Chris Gallagher; Editing by Robert Birsel)
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