Federal Reserve Board member considers distributed ledger technology the most important development in the payment, clearing and settlement fields in recent years

Rage Comment : Payment systems have always been an important area of ​​regulation. In order to maintain public information about payment systems, the Federal Reserve has strongly advocated innovative technologies that can reduce unnecessary friction and lower costs. At this year's International Finance Institute blockchain seminar, the Federal Reserve Board fully affirmed the contribution of blockchain technology to the payment, clearing and settlement fields, and will strengthen cooperation with financial institutions and other stakeholders in the future to enhance understanding of the technology and avoid pitfalls.

Translation: Nicole

As part of his presentation at the Institute of International Finance's blockchain seminar, Federal Reserve Board (FRB) Governor Lael Brainard gave a speech on distributed ledger technology, stating that the technology may be the most important development in the field of payment, clearing and settlement in recent years. Brainard emphasized that payment systems are an important area of ​​regulation, and he pointed out that the FRB hopes to maintain public confidence in payment systems while strongly supporting innovations that provide broadly shared benefits to the public, including innovations that reduce unnecessary friction, reduce costs and reduce delays.

Lael Brainard

In it, Brainard discussed several use cases from previous discussions between the FRB and industry stakeholders, aiming to illustrate the potential of distributed ledger technology and the considerations that are critical to the FRB after evaluating its advantages and risks. Regarding the risks that may arise from the use of distributed ledgers, Brainard said:

“What matters to policymakers and regulators in the transition to new technology platforms is not whether risks increase or decrease, but whether those risks become more transparent or more hidden, and how they are distributed between financial intermediaries and end users.”

Brainard pointed out that in the future, the FRB will further strengthen its cooperation with a range of financial institutions and other stakeholders to enhance its understanding of new technologies, and will focus specifically on its responsibilities for payment systems and supervision of financial market intermediaries. The FRB expects to publish a research paper at the end of this year, which will summarize some of the important findings on this topic that the industry has participated in so far.