The Bank of England has been one of the more aggressive central banks to investigate blockchain and distributed ledger technology, but at least one of its officials doesn’t believe widespread adoption will happen anytime soon.
Andrew Hauser, the central bank’s executive director for banking, payments and financial resilience, made the remarks during a speech on the history of how the Bank of England developed its settlement systems over the past 20 years. His speech took place at the CREST Twentieth Anniversary Conference on 20th September, an event commemorating the launch of the UK-based securities depository.
His comments come after the Bank of England released a consultation paper on the development of its next-generation settlement service and the role in which the technology might play. The Bank of England has spent months investigating the prospects of a central bank-issued digital currency, and recently formed a fintech accelerator aimed at supporting that and similar initiatives.
Hauser remarked that financial technology more broadly would shape the way the central bank develops new systems, going on to highlight distributed ledgers in particular. Yet he struck a conservative tone as to how quickly adoption would play out over the years to come.
Hauser told attendees:
"There is no likelihood of such an extreme revolution occurring any time soon: much more work is needed across a whole range of issues, including: speed and scaleability; confidentiality protections; developing common protocols; integrating cash and securities movements; and establishing regulatory and legal norms.”
More likely, he went on to say, are "less ambitious but still potentially transformational" uses in certain areas, particularly in cases where market infrastructure could use improvement.
Hauser also noted that financial institutions looking to work with the technology need to decide whether to pursue it alone or in group fashions, a reference to efforts such as the R3 distributed ledger consortium.
"But doing neither is a risky approach," he added.
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