Mark Carney: “Tokens secured by the Central Bank unlock billions of pounds of capital”

Bank of England Governor Mark Carney said that blockchain projects will help “unlock billions of pounds of capital and liquidity,” and once will be able to establish close cooperation with the Central Bank.

According to a published document, in a speech devoted to new forms of financial products and services, Carney said that “the Bank of England plans to hold consultations on opening access to a balance for new payment systems.” He also noted that “this access may expand opportunities for new innovations”. In addition, Carney mentioned projects in the field of technologies of the distributed registry (DLT) and blockchain:

“In the wholesale markets, consortia of broker-dealers are working to create settlement systems using distributed registry technology that can change the performance of markets. These consortia, such as Utility Settlement Coin, offer to issue digital tokens fully supported by central bank money, which allows instant calculations, ”he said.

“This may include smart contracts and“ tokenized assets ”- ordinary securities, also represented in the blockchain. In addition, it can improve the efficiency and sustainability of operational processes and reduce the risks of counterparty participation in the system, opening up billions of pounds of capital and liquidity that can be used more productively. ”

At first glance, in the comments there is a hint, albeit a brief one, that companies using DLT will be able once to connect directly to the services of the Bank of England. As reported at the beginning of the month, the Utility Settlement Coin project, supported by the world’s largest banks, raised more than $ 63 million in funding for commercialization.

Carney also returned to the topic of the development of the Libra cryptocurrency, which he touched on earlier this week. Then he declared that he expects high standards of regulation from the new stablecock, and on Thursday he repeated this opinion.

“The Bank of England is unbiased about Libra, but with caution. Unlike social networks, for which standards and rules are discussed after they have been accepted by billions of users, conditions for participation in innovations such as Libra should be adopted before they are launched, ”said Carney.

He noted that if Libra implements its plans, it will become a systemically important project:

“As such, it must meet the highest standards of regulation of financial services and consumer protection. It must solve problems, ranging from combating money laundering to data protection and operational stability. Libra should also be a competitive, open platform that new users can join at any time. In addition, the authorities need to carefully consider the value of Libra for monetary and financial stability. ”

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