Hiromi Yamaoka, head of Bank of Japan’s payment and settlement system department, feels that digital currencies will not replace physical money any time soon. I’s too far off, he said informally while participating in a forum on financial innovation. It would change the banking system too drastically, he added. In Japan, the government has recognized bitcoin as legal tender and approved several companies as operators of cryptocurrency exchanges. The central bank had set up a section to deal with fintechs to offer guidance to banks seeking new business opportunities, and joined up with the European Central Bank to study distributed ledger technology like blockchain. However, the two entities had later described blockchain not mature enough to power the world’s biggest payment systems.
