Tokyo Japan, The FSB, has settled on a scheme for classifying fintech and evaluating the liabilities.
The FSB, made up of central bankers, regulators and finance ministry officials from the Group of 20 economies, is looking at fintech partly in response to uncertainty over whether it will “disrupt” traditional banking.
There are few huge investment financial institutions, including Goldman Sachs, are already investing in fintech. Analysts at Citi said this month that investment in fintech had grown from $1.8 billion in 2010 to $19 billion last year, mostly in payments systems.
Citi said the “tipping point” for disruption (for banks) was not far away in the United States and Europe, and had already been reached in China where fintech companies have as many, if not more customers than the major banks.
FSB Chairman and Bank of England Governor Mark Carney told a news conference broadcast from Tokyo on Thursday that the FSB did not have crucial responsibility about fintech and members wanted to look for favorable circumstances to apply it.
He said policy intervention by other authorities such as in competition, conduct and consumer protection, would need come before any financial stability considerations.
Blockchain, or distributed ledger technology, is used to underpin the web-based currency bitcoin but could have a wide range of other uses, including settling securities transactions, where legal ownership is exchanged for cash.
Carney said there was potential to free up some capital requirements for institutions because settlement would be in real time as opposed to delayed.
Michael Bodson, president and chief executive of DTCC, the U.S. securities clearing and settlement company, said on Tuesday that regulators needed to have a strong voice in how blockchain is evolved in markets to ensure financial stability is safe.