New technologies like blockchain, robo advisors or crowd funding could have the potential to make financial markets and services faster, more efficient, more convenient, and more inexpensive for everyone, President of the Deutsche Bundesbank said recently.
Speaking at the 9th Annual IIF G20 Conference "The G20 Agenda under the German Presidency", Frankfurt am Main, 15 March 2017, Dr Jens Weidmann, Deutsche Bundesbank President and Chairman of the Board of Directors of the Bank for International Settlements shared his views on digitalization of financial sector, among other things.
Weidmann said that digitalization can boost competition in the financial sector, particularly as fintechs are making inroads into this sector. He noted that some central banks are researching the implications of blockchain technology, adding that the Bundesbank is among them.
“To identify the requirements which central banks might need to meet in future in connection with blockchain-based instruments, the Bundesbank and Deutsche Börse AG have jointly unveiled a prototype for a securities settlement system based on blockchain technology”, Weidmann said while clarifiying that the project aims to analyse the technological performance and scalability of blockchain-based applications, not to issue a digital euro coin.
Furthermore, he emphasized on the regulation of fintechs, noting that several corporations using technology-enabled financial innovations operate either on a global scale or carry out a large number of cross-border transactions.
In his concluding remarks, Weidmann said “Carrying out deregulation in the hope of stimulating the economy could backfire. Insufficiently regulated financial markets can do significant harm to economic prosperity if a crisis occurs, as the latest financial crisis has painfully demonstrated.”
