Current innovations in information technologies are expected to have significant impacts on the financial industry and financial services, Bank of Japan Governor Haruhiko Kuroda said on Monday.
Speaking at the Paris EUROPLACE Financial Forum in Tokyo, Kuroda discussed the development of fintech sector as well as blockchain or distributed ledger technology (DLT).
He said that recent financial innovation or fintech revolution has huge potential to change the structure of financial services. Kuroda believes that fintech can globalize, personalize, and virtualize financial services.
The BoJ established its "FinTech Center" on April 1, in order to facilitate the development of fintech. It has also built up its "FinTech Network" which promotes the sharing of information and expertise related to fintech in a cross-sectoral manner.
Calling DLT as a technology symbolizing fintech, Kuroda said that it has the potential to significantly affect money and ledgers, which are the basic infrastructure for financial activities. He also noted ongoing blockchain-based experiments by private entities and emphasized on the need for central banks to understand the technology.
“In order for central banks to fulfill their responsibilities such as ensuring the stability of payments and settlements, it is becoming increasingly important to have a profound understanding of new technologies including DLT”, he said.
To that end, Kuroda said that the BoJ’s Payment and Settlement Systems Department is deepening its understanding of new technologies by test-driving distributed ledgers. However, he clarified that these trials aim to understand the mechanics of DLT, rather than applying it to the bank's liabilities or its payment and settlement systems.
“The Bank, as the central bank of Japan, is dedicated to supporting the healthy development of FinTech, in order to enhance the welfare of financial service users as well as economic activities”, Kuroda said.
