A summary of the Bank of Japan Forum on Payment and Settlement systems, released on Friday, revealed that public blockchains were discussed in a positive light. Banks and financial institutions typically focus on projects using private blockchains, where a greater amount of privacy and control can be held by the issuer. Their public counterparts, such as Bitcoin’s blockchain, are usually sidelined. The Bank of Japan (BoJ) Forum was held on March 17 and 18, with 49 companies and organizations participating on the first day and 45 on the second. Kenji Hoki, a Senior manager at one of Japan’s leading audit corporations with approximately 5,600 professionals, KPMG AZSA LLC , delivered the opening presentation. Using the term Distributed Ledger Technologies (DLTs) in place of blockchains, Hoki discussed the merits of “private-type” versus “public-type.” According to Hoki, private would be the “only feasible choice” for security settlement, adding that public would be “a bit too costly and take too much time in finalizing the settlements.” While claiming that public DLTs are suitable for retail payments, it would be difficult to judge which is better for fund settlements, he argued. “Public-type DLTs would be suitable especially for retail payments with huge volume and standardized procedures. Nonetheless, it would be necessary to overcome the possible flaws in public-type DLTs such as lengthy process of ‘mining’ that could hinder real-time settlements.” – Kenji Hoki, KPMG AZSA Senior Manager The Senior Manager then discussed an increasing use of digital currencies, based on public DLTs, which “could prevail instead of sovereign currencies.” “When digital currencies become to be widely used, people will not have to have bank accounts for payment purposes.” Commercial banks could become “unable to provide ‘finality’ to payments,” Hoki states. In this scenario, non-bank financial intermediation “might become more pronounced,” he claimed, and […]
