We have seen many central banks monitoring blockchain and its possibilities of taking advantage of the distributed ledger technology. One of them was the Bank of England, assessing how beneficial could blockchain be for the financial system. Nevertheless, some of its officials do not believe in such adoption or its optimistic effects at all.
Andrew Hauser, is the central bank’s executive director for banking, payments and financial resilienc. He has made the remarks during a speech about the history of Bank of England and how it developed its settlement systems over the past 20 years at the CREST Twentieth Anniversary Conference on 20th September.
Hi speech came right after the Bank of England published a consultation paper on the development of its next-generation settlement service and the role in which the technology might play. The Bank of England has been investigating the prospects of a central bank-issued digital currency, and now it formed a fintech accelerator aimed at supporting that and similar initiatives.
Hauser stated that financial technology would adjust the way the central monetary authority develops new systems, going on to highlight distributed ledgers in particular. Yet he struck a conservative tone as to how quickly adoption would play out over the years to come.
Hauser stated:
“There is no likelihood of such an extreme revolution occurring any time soon: much more work is needed across a whole range of issues, including: speed and scaleability; confidentiality protections; developing common protocols; integrating cash and securities movements; and establishing regulatory and legal norms.”
Hauser also added that financial institutions looking to work with the distributed ledged technology need to decide whether to pursue it alone or in group fashions, a reference to efforts such as the R3 distributed ledger consortium. “But doing neither is a risky approach,” he stated.
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