In a speech prepared for the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, Mark Carney, governor of the Bank of England (BoE), revealed that the BoE is launching a fintech accelerator.
“I am announcing tonight that the Bank is launching a fintech accelerator to work in partnership with fintech firms on challenges that we, as a central bank, uniquely face,” Carney says in his prepared remarks. “The accelerator will work with new technology firms to help us harness fintech innovations for central banking. In return, it will offer firms the chance to demonstrate their solutions for real issues facing us as policymakers, together with the valuable ‘first client’ reference that comes with it. With time, the accelerator will build a network of firms working in this space for the benefit of us and them alike.”
Distributed ledger technology is an important aspect of emerging fintech. “[If] distributed ledger technology could provide a more efficient way for private sector firms to deliver payments and settle securities, why not apply it to the core of the payments system itself?” Carney says. “The great promise of distributed ledgers for central banks is their potential to enhance resilience. Distributing the ledger means multiple copies of the system. It can continue to operate if parts get knocked out. That removes the single point of failure risk inherent in a centralized system.”
However, the BoE is not prepared to risk the stability of the financial system by introducing still unproven emerging technologies too early in the payment system. Rather, the BoE intends to thoroughly study the opportunities offered by distributed ledger technologies (DL) as well as the challenges that need to be met before it could be used in central banking. “To help distinguish DL’s potential from its hype, […]
