Bank of England Governor: Distributed ledger technology has the potential to unlock the liquidity of billions of bank funds

According to Coindesk, on June 20th, Bank of England Governor Mark Carney attended the London City Mayor's Dinner, saying that the distributed ledger technology (DLT) project could "unlock the potential of billions of pounds of liquidity" And may work more closely with the central bank in the future.


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In a speech on the theme of new financial products and services, Carney announced that “the Bank of England plans to negotiate with the new payment service providers on the opening of our balance sheet” and said that this can bring a series of Innovation ability.

Carney introduced the blockchain and DLT frontier development and told attendees:

In the wholesale capital market, the Brokers Alliance is working to develop a settlement system using distributed ledger technology that revolutionizes the way the market operates. Alliances such as Utility Settlement Coin (USC) [1] recommend issuing digital tokens that are fully funded by central bank funds, allowing for instant settlement. At the same time, the introduction of “pass-through assets” in smart contracts – equivalent to “traditional securities” on the blockchain, can improve the efficiency and flexibility of the operational process, reduce the risk of counterparties in the system, and unlock the flow of billions of funds. Sex, thereby increasing production efficiency.

On the surface, Carney's comments suggest that companies using DLT may one day have direct access to the Bank of England business.

According to a report by the Wall Street Journal in early June, the company behind the USC, Fnality, raised more than $63 million in new funds.

In addition, Carney mentioned Facebook's latest cryptocurrency Libra. He hopes Libra will comply with high standards of compliance and regulatory requirements.

Carney said:

The Bank of England views Libra with an open mind, but the door is not open. After the participation of billions of users in this social media, standards and regulations are still immature. However, the Libra project is different from this, and the terms of participation must be clearly defined before launch. If Libra goes well, its way of working will play an important role.

Carney continued:

Therefore, it must be prudently regulated and meet the highest standards of consumer protection. It must address issues such as anti-money laundering, data protection, and operational flexibility. At the same time, Libra must be an open platform for competition, and new users can join on an equal footing. In addition, the authorities need to carefully consider their impact on monetary and financial stability.

To this end, the Bank of England Governor concluded that:

Consumers have the right to receive the above protection.

On June 19th, Federal Reserve Chairman Jerome Powell said that Facebook had met with Fed representatives and the Fed was concerned about the progress of the project.

Powell said at the press conference, "I want to respond to President Carney. If the Bank of England decides to take action, the Fed will have high expectations for security, stability and other regulatory aspects."

1. Launched by UBS, Barclays Bank, Credit Suisse, Imperial Bank of Canada, HSBC, MUFG and State Street all joined the project.