The Bank of England and the City should embrace blockchain technology more boldly, in order to steal a competitive advantage after Brexit, according to comments from a British Member of the European Parliament today.
MEP Kay Swinburne, who sits on the EU Economic and Monetary Committee, reportedly suggested that the ‘status quo’ would be too risky for the British financial sector after Brexit, identifying blockchain technology as one area where the UK could make advances to stay competitive.
Describing how the UK could ‘leapfrog’ over competing markets, Swinburne said that by getting behind new technologies like blockchain, the UK would remain a relevant global player.
“The UK post-Brexit: how does the City of London stay relevant? The City of London stays relevant by suddenly becoming the proponents of the new technologies and not just patching existing systems to make them work post-Brexit, actually leapfrogging.”
“We’ve got proof of concept of DLT in so many areas. It now needs to be scaled up. We’ve got to take some risks. We have the opportunity to really make a difference in a way that I don’t think Europe post-Brexit is going to be able to do.”
The Conservative MEP went on to suggest the Bank of England could take a lead on blockchain initiatives, and could spearhead efforts for greater adoption throughout the City and the wider financial system.
Arguing that the bank should become the first central bank to ‘open up’ to the ideas and potential benefits of cryptocurrency and blockchain more broadly, she concluded that monetary policy in the future “doesn’t involve issuing notes all the time, maybe it involves other alternative payment systems.”
The UK has already expressed intent with blockchain technologies, with the Bank of England in particular highlighting potential applications for the technology. Similarly, the Financial Conduct Authority, the UK’s financial regulator, operates a regulatory sandbox for developing companies in the space since 2016.
Further, the UK government’s innovation arm Innovate UK pledged just under £20 million to support the development of new technologies, including blockchain.
While support to date for the technology has been forthcoming, it remains to be seen whether UK policymakers will heed the advice.