Senior BoE official says UK banks will not stifle fintech innovation

The Bank of England's top priority is to create a regulatory approach to fintech and understand what impact it will have, a senior Bank of England official said, according to Reuters.

Victoria Cleland, treasurer director at the Bank of England (BoE), said the risks and benefits of digital currencies and blockchain are being assessed.

The BoE's announcement comes as UK policymakers are wondering whether London will remain a global hub for financial technology, or whether many companies will move to other European countries.

Cleland said the Bank of England is working with companies in the fintech sector to identify areas where fintech can be used.

At the P2P lending conference, she made a comparison between FinTech and the global industry and pointed out that FinTech needs to be carefully regulated. She said:

“It’s hard to decide how to regulate something when you don’t know what it is.”

UK bank aims to boost fintech development

Back in June, the Bank of England announced plans to explore new financial technologies by working closely with other companies to improve its cybersecurity and payment systems.

Through its accelerator programme, Bank of England has secured applications from companies that aim to help banks harness fintech.

Bank of England Governor Mark Carney said embracing fintech could improve the use of financial markets and thus strengthen monetary policy.

He said:

“Fintech should not be left to its own devices, nor should it be killed in the cradle. Banks are investing significant resources to ensure that the technologies they are working on are sustainable and not ephemeral.”

Create your own cryptocurrency

According to an earlier report from CNN, the Bank of England is taking a closer look at digital currencies and is trying to modernize its processes this year in order to stay ahead of the competition.

Last month, CNN reported that researchers at the University of London developed the RScoin digital currency at the suggestion of the central bank.

The Bank of England appears to understand the advantages of digital currencies and recognizes that this type of trade can be executed better than traditional trade.

Not only that, as one of the few banks to create its own cryptocurrency, the Bank of England is taking steps to improve their operational services compared to those that simply rely on blockchain technology.

Bitcoin will not replace fiat currency

Of course, despite this, Ben Broadbent, deputy governor of monetary policy at the Bank of England, said that the issuance of digital currencies would bring risks to banks, and digital currencies such as Bitcoin would not replace the US dollar or the pound at any time in the future.

Perhaps Ben is right, but the fact that the Bank of England is embracing fintech and researching Bitcoin and blockchain technology is a key step in the right direction for the central bank.