The Bank for International Settlements (BIS) is boosting its response to innovative financial technology such as cryptocurrency by appointing European Central Bank board member Benoît Cœuré as the head of its new innovation hub.
The BIS, which is based in Basel, Switzerland, hosts several important committees responsible for the oversight and stability of the world’s financial system, including the Committee on Payments and Market Infrastructures (CPMI), which Cœuré has chaired since 2013.
a worldwide reduction in the use of cash
Cœuré, who starts his new job in January 2020, has also led the G7 working group on global stablecoins and co-chairs a related Financial Stability Board (FSB) working group.
The BIS, which acts as a coordinating body for central banks, has been monitoring closely the trends in the global payments system. These include a worldwide reduction in the use of cash and an acceleration in the uptake of digital currencies and the associated digital and mobile wallet technology.
In some Asian countries, digital currencies are tightly linked to powerful social media firms. Earlier this year, US tech giant Facebook announced plans for its own payments coin called Libra.
“I am delighted to have Benoît on board to advance the important mission of the hub, which is to harness innovation to improve the functioning of the international financial system,” said BIS general manager Agustín Carstens.
“Innovation is driving change in many fields and can bring great benefits for anyone who makes and receives payments. The hub reflects central banks’ commitment to share resources and lay the foundations for the future,” Carsens said.
Mr Cœuré said: “I am very happy to be joining the BIS. I look forward to bringing my expertise to the global central banking community at this time of rapid technological change. We must make the best use of innovation to support financial stability and promote financial inclusion.”
The BIS innovation hub will operate in three locations: Switzerland, Hong Kong and Singapore. The Swiss centre is already researching the topics of asset tokenisation and fast-paced markets, both areas of finance where technology plays a crucial role.
“the evil spawn of the financial crisis”
Cœuré has spoken out in the past against non-government-sponsored attempts to reform money.
A year ago he called bitcoin “the evil spawn of the financial crisis”, labelling the decentralised digital currency an “extremely clever idea” but not a good one.
At the same time, Cœuré spoke out for greater government and central bank research into digital currency and for greater coordination of their efforts.
“The CPMI started studying cryptos and the underlying distributed ledger technology (DLT), including blockchain, early on. Back in 2015, we released a report on cryptocurrencies – today, for well-known reasons, we like to speak of them as assets – and last year we published an analytical framework for looking at DLT,” Cœuré said in November 2018.
“That said, there is still much that we do not understand, and things are moving rapidly,” he added.
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