Fiat currencies are hampering blockchain innovation – at least according to David Harris, head of commercial innovation at the London Stock Exchange Group (LSEG).
In a keynote address at the third annual London Blockchain Summit today, Harris told a crowd of about 150 global bankers, insurers and technology providers that he looks forward to a day when central banks will issue their own cryptocurrency.
While not a new aspiration, the reason Harris gives for wanting to move to a cryptocurrency equivalent notably stems from LSEG's role on the Borsa Italiana project, which looks to issue securities on a blockchain. But even with tests underway, in which multiple unlisted companies have been given access to services normally reserved for public firms, LSEG continues to encounter obstacles related to paying for securities with cash.
"Eventually, and hopefully, central banks will issue their currency in a digital form on a blockchain, because then that will facilitate collateral movement," Harris said.
But, Harris is conscious that there are factors that could impede a swift embrace.
As blockchain technology was in large part developed to make banks and other middlemen unnecessary, once a central bank decides to issue a cryptocurrency, that could call into question the entire concept of commercial banking, Harris said.
As Harris puts it, "nothing is easy."
David Harris image via Michael Del Castillo
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.