Major central banks worldwide have spent the past year organizing their own working groups dedicated to exploring blockchain technology and digital currencies.
During a three-day event in Washington, DC, hosted by the World Bank, the Intentional Monetary Fund and the US Federal Reserve, representatives from a range of central banks worldwide offered private details about the ongoing work at their respective institutions.
At the gathering last week the central bank leaders expressed broad interest in how the technology might impact both the banks they regulate as well as their own regulatory practices, attendees say.
Perianne Boring, who is the president and founder of the DC-based Chamber of Digital Commerce, which helped organize the blockchain portion of the event, said in interview those institutions haven’t made much of this work publicly known in the past.
Boring told CoinDesk:
“What we learned is that there were a number of central banks around the world who have digital currency and blockchain focus groups. These aren’t things that were necessarily announced, but were discussed in off-the-record conversations.”
Blockchain and FinTech was the focus of the 16th annual three-day Conference on Policy Challenges for the Financial Sector, which began on 1st June at the Federal Reserve headquarters in DC.
Ninety central banks from around the world participated, according to organizers. The Federal Reserve declined comment.
Blockchain pitches
During the event, Chain CEO Adam Ludwin gave a keynote address about blockchain, followed by a panel discussion that featured Boring, Bloq founder Jeff Garzik, Nasdaq vice-president Fredrik Voss and Goldman Sachs managing director Tom Jessop.
It was in the aftermath of that panel, as well as in private conversations throughout the event, that Boring says the degree of engagement from central bank officials began to become apparent.
Central bank representatives posed a wide range of questions that demonstrated an “astute” and “attuned” understanding of the technology, she said.
According to Boring, a number of “higher level questions” came from central banks leaders from emerging markets in particular, drawn from institutions in both Africa and South America that expressed interest in how blockchains and digital currencies might help them compete globally.
Notably, central banks based in Asia reportedly expressed concern about the true identity of Satoshi Nakamoto, the pseudonymous creator of bitcoin.
“It was really difficult for them to put trust in the system where they don’t know who the inventor was,” said Boring.
Bloq co-founder Matthew Roszak said in an interview that many of the attendees seemed interested in how they might leverage the technology in order to improve how their institutions operate.
Roszak told CoinDesk:
“They’ve got an appreciation of what this tech does and what it can’t do. They can now view this as a tool to do their jobs better. They’re in the policy-making seats of central banks and this type of technology presents unprecedented visibility and transparency.”
Central banks take interest
Last week’s event was the first time a group of central bank officials this large has gathered to explore blockchain technology.
But over the course of the past few months, multiple central banks have taken a public stance on their potential use of distributed ledgers and digital currencies.
In recent statements, an official with Russia’s central bank said that a state-sponsored digital currency was “still on the agenda” and that, if adopted, the technology could deliver a range of benefits.
A Bank of Japan official said last month that central banks around the world need to pay attention to blockchain. Both France’s central bank and Holland’s central bank have made public their efforts in the digital currency and blockchain spaces as well.
In February, the Financial Stability Board – an international organization composed of senior finance regulators and central bank officials from the world’s major economies – began looking into the technology as a group, signaling that interest transcends the level of individual central banks.
Boring said that the Chamber of Digital Commerce has seen inbound interest from several central banks and expects to work closely with those institutions on further consultations.
“A number of us have received requests to do briefing with various central banks,” she said. “There are a couple different central banks that have asked us to come in and elaborate in one-on-one sessions.”
Image courtesy of the Chamber of Digital Commerce