Bank of Japan says Blockchain Could Expand Central Bank Access

Last week, a statement has been issued by a senior Bank of Japan official speculated that central banks could allow access to accounts around the clock if they used blockchains or cryptocurrencies.

On 21^st April, speaking during a finance forum, deputy governor Hiroshi Nakaso touched about so-called central bank digital currencies, or CBDCs, and their potential impact on how people interact with their accounts at a given time.

Through a CBDC (something that officials at the Bank of England have highlighted in the past), one proposal is to offer central bank accounts to retail customers. In his speech, Nakaso brought up this idea, suggesting that, depending on the degree of adoption, such an arrangement could give accountholders continuous access to funds.

Nakaso opined:

“In an utmost case in which CBDC proffers the not different functionality as banknotes as an alternate measure, it could sanction everyone to access central bank accounts 24/7, year-round. Some overseas central banks have accelerated to consider the rationale for or to conduct researches and analyses on CBDC."

Many central banks today are testing the concept of a legal tender issued in a wholly digital medium.

In the past month, Hong Kong's de-facto central bank moved to begin testing a CBDC, and in March, authorities in Singapore completed a similar trial. Central banks in Canada, China, Sweden and the UK, among others, also have projects in various stages of development.

The Bank of Japan itself has been trailing the tech, noting in statements in December that it was "test driving" the concept ahead of any possible applications. Late last year, for example, the Bank of Japan inked a deal with the European Central Bank to collaboratively research blockchain.

As if turned to stone, the Bank of Japan has been largely tight-lipped on the work's potential impact, choosing to emphasize its early and experimental nature.