Mark Carney, the governor of Bank of England vows to reinvent the central banks to make it fit for the “new economy” of
“Fourth Industrial Revolution.”
The central bank has been opening up its payments infrastructure to fintech startups, said the governor, making climate change a key priority and embracing artificial intelligence to help the bank adapt to changes in tech and global economy.
During his speech at the Innovate Finance Global Summit, Carney said,
“That new economy requires a new finance. A new finance to serve the digital economy, a new finance to support the major transitions underway across the globe, and a new finance to increase the financial sector’s resilience.”
Given the fact that the very nature of commerce is changing, places new demands on finance. And this new economy needs a new Bank of England. For this, the strategy Carney said is to enable innovation and empower competition while ensuring financial and monetary stability.
“Consumers and businesses increasingly expect transactions to be settled in real time, checkout to become an historical anomaly, and payments across borders to be indistinguishable from those across the street,”
Governor, Mark Carney: “New finance can unlock more sustainable and inclusive growth, provide consumers greater choice, SME businesses access to credit to grow – all of which ensures the financial system can become more resilient” #IFGS2019 pic.twitter.com/HDrjluZoeD
— Innovate Finance (@InnFin) April 29, 2019
Carney, who has been in charge of the Bank of England since 2013, has been a supporter of the fintech sector during his time at the UK’s central bank.
In July 2017, the banks carried out a successful test of Ripple’s “interledger” programme to synchronize payments between central banks’ systems. Ripple has been gaining a lot of support from commercial and central banks all over the world.
In January this year, in an AMA style discussion, Carney has shared how the bank had already teamed up with Ripple to work towards distributed ledger technology, digital assets, cybersecurity, machine learning and much more.
For its proof-of-concept study, he had said,
“the system is working properly and could in principle be used for cross-currency conversions.”
Being an ardent supporter of fintech and forming partnerships with new age solutions like Ripple could be why the UK has emerged as the fastest growing sectors in the wake of the financial crisis. Carney is due to stand down as the Bank of England governor in January 2020 and the search for a replacement has already begun.
Earlier this year, per the report released by World Economic Forum, more than 40 central banks are conducting research and/or implementing blockchain solutions. Furthermore, with IMF’s Christine Lagarde saying the cryptos are shaking the world, for the digital assets space, it’s just the beginning and a lot more has to come.