IMF held today its first high-level advisory meeting on Fintech with most of the focus being on blockchain technology.
According to IMF’s website, the focus was on discussing:
How new technologies can disrupt the nature and provision of financial services and the implications that these changes may have for financial stability and regulation.
A number of senior-level executives, including Jeremy Allaire of Circle, Carolyn Wilkins, Deputy Governor of the Bank of Canada, Tao Zhang, former Deputy Governor of the People’s Bank of China (PBOC), Jill Carlson from Chain, and others, attended.
It’s not very clear what was said behind closed doors, but a livestreamed panel took place where the general theme of balance between innovation and risks, transparency and regulations, was expressed according to reports.
In particular, the panel appears to be of the view that innovation needs to be given room to grow, but at the same time risk needs to be managed. Moreover, while blockchain based innovation may increase risk, it also increases transparency.
According to reports, a panelist noted that FinTech will increase inclusion and therefore improve financial stability, but at the same time add new challenges as money can flow freely across the globe.
Interestingly, ICOs were brought up, with one panelist stating that it is a trend which will impact the financial industry significantly. It’s the first sign this fairly new development has attracted such high level attention, but hundreds of millions have been raised through ICOs in the past year.
The ICO space is currently a bit of a wild west and in a state of flux as well as confusion. On the wild west aspect, there are hardly any quality checks, verifiably independent audits, etc. There are so many of them that few receive even a prima facie look by journalists. Sometimes, even when they do get their attention, the project developers might fail to respond to any probing questions.
The obvious solution here, at this very early stage, is a non-governing body, perhaps supervised by a regulatory authority such as Britain’s FCA. Since ICOs are by their nature international, such non-governing body recognized worldwide would also probably be better than balkanized global regulations which may be contradictory.
Featured image from Shutterstock.