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Bank of England deputy governor, Sarah Breeden, asserted that the UK is poised for a technological revolution in finance, revolutionizing the cost and usage of money, and introducing micropayments and automatic payments for goods delivery. This transformation necessitates urgent action to prepare the UK’s finance sector for widespread, fundamental technological change.
Quick Facts
- Bank of England official, Sarah Breeden, highlights imminent technological revolution in UK finance.
- Technological advancements may lead to new players challenging traditional banks.
- Potential benefits and risks in the innovation of payment technologies, such as central bank digital currency and stablecoins.
Bank of England Deputy Governor Sarah Breeden emphasized that the UK is on the brink of a significant financial transformation, advocating for immediate action to adapt to the impending technological revolution. This revolution may introduce a wave of new players, posing a threat to established banks. Breeden stressed the importance of designing a central bank digital currency and regulating stablecoins to accommodate the anticipated changes in money usage.
Whilst the advancements in payments innovation offer substantial advantages for customers and businesses, including economic growth, Breeden also acknowledged the associated risks. She cited potential challenges arising from the rapid systemic scale of new market participants if traditional finance fails to keep pace with innovation. Examples of nascent technologies were provided to illustrate the transformative potential in payments for consumers and businesses, such as automatic payments for goods delivery and instant refunds for delayed services, like train journeys.
Breeden emphasized that these technological developments are likely to reduce the cost of retail payments and enable the feasibility of micropayments, revolutionizing traditional payment models. She further highlighted the inevitability of a technology revolution engulfing the finance sector at a pace, breadth, and depth similar to that experienced in other economic sectors. Additionally, she disclosed the forthcoming publication of a Bank of England discussion paper on payments innovation and safety during the summer.
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