Bank of Japan Deputy Governor Gives Speech on Blockchain

Rage Commentary : The Deputy Governor of the Bank of Japan elaborated on several topics surrounding blockchain; he pointed out that the potential of blockchain is undeniable, but it is currently immature, so Japan cannot blindly cancel the existing currency and use digital currency. Therefore, Japan is cautiously conducting technology research and development on the premise of fully recognizing the shortcomings of its advantages, hoping to gradually change the financial and banking infrastructure.

Translation: Annie_Xu

Hiroshi Nakaso, deputy governor of the Bank of Japan, has revealed that he will apply Internet finance and blockchain technology to the Japanese banking system. Nakaso also denied rumors that Japan plans to abolish existing currencies and use digital currencies.

Speaking at a central bank conference at the University of Tokyo, Nakaso said he believes in the potential of blockchain to revolutionize banking and financial infrastructure. Providing banking services to people in the third world could lead to more positive interactions between the financial industry and the economy.

Nakaso divides Internet financial technology into three parts: blockchain, artificial intelligence or big data, and smartphone innovation. Combining the three can realize virtual banks. Of course, problems still exist, such as supervision and taxation; and blockchain technology cannot be truly applied in the real world.

Hiroshi Nakaso

Nakaso said the failure of the bitcoin exchange Mt. Gox did not represent an inherent flaw in bitcoin, but rather a violation by a third party. Such problems will continue to occur as long as decentralized systems like bitcoin continue to trust third parties.

Finally, Nakaso said that Japan has no plans to replace the existing currency with digital currency. Although many people support this idea, digital currency can reduce costs and eliminate current processing and storage fees. However, the problems that may arise will be more complicated and time-consuming. A strong system needs to solve the problem of transaction information processing, as well as the problems of the central bank itself.

Nakaso's talk shows that Bitcoin and blockchain have a bright future in Japan. Many countries are already embracing the technology, with China becoming a major region for blockchain talent recruitment, and Japan will follow suit.