In a “Livery Room” session during the recent Open Forum 2015 hosted by the Bank of England, blockchain expert Blythe Masters points out the efficiency of the blockchain technology in the settlement of assets and transfer of value.
“The role of central banks and other intermediaries as well in administering monetary systems and currencies would be rendered redundant. The idea is, the invention of technologies would allow peer to peer transfer of value and immunize the newly invented currency system from inflation, deflation, counterfeiting and anonymity,” said Masters.
Developments in digital technology also have the potential to re-shape the financial services sector, where many of the products and services offered relate to digitised information. One example is the distributed ledger technology (eg the blockchain). This technology underpins digital currencies and has raised the potential for payments to be executed through the reliance on trusted technology, rather than the reliance on a trusted central authority, with corresponding implications for payments and settlement within and across financial markets.