New technologies like blockchain represent a major policy challenge, according to the head of Ireland’s central bank.
According to a newly-published transcript from a speech in late May, Philip Lane, governor of the Central Bank of Ireland, said that the central bank has moved to establish an internal working group focused on financial technology innovation. It’s an approach that other central banks have taken as technologies like blockchain are poised to potentially enhance or replace some of their infrastructure.
But opportunities aside, the tech also presents issues, Lane said during an event hosted by the Banking and Payments Federation of Ireland.
He went on to say:
“…novel innovations in the markets sector, such as distributed ledger and crypto currencies, may present the largest policy challenges given their complexity and novelty. Finally, we note that many Fintech start-ups will have limited regulatory expertise and this may present policy challenges in communicating the scope and requirements of the authorisation regime and the role of the Central Bank.”
Those perceived risks haven’t stopped Ireland’s private sector from testing the tech, however.
Last April, the Bank of Ireland – one of Ireland’s “Big Four” banks – revealed that it was working on a trade reporting prototype in partnership with Deloitte, which itself has made Dublin a hub for its work with blockchain.
More recently, members in a major Irish fund managers group collaborated on a test of their own, similarly exploring the tech for use as a data reporting tool.
Image via Central Bank of Ireland/YouTube