Confined by a self-imposed ban on talking about Brexit, the Bank of England governor will use his high-profile annual address to London’s financial community on Thursday to talk about the technology behind crypto-currencies. Coming two weeks after Federal Reserve Chair Janet Yellen addressed the topic, his choice underscores how central bankers are embracing an innovation that could turn finance on its head.
Carney’s thoughts on digital currencies will be the BOE’s highest profile yet on the topic, and his last public comments before the U.K.’s referendum on EU membership next week. He told lawmakers last month the speech will focus on what fintech developments mean for the structure of the financial system and what officials are “doing to enable that.” The governor has previously shown a willingness to stray beyond the realm of regular central banking, and he’s now moving into an area that has ramifications for payments, cyber security and the reach of monetary policy.
“The central bank adoption of a crypto version of a fiat currency would be a game changer,” says Daniel Marovitz, the president of Earthport Plc, a London-based firm that’s building an alternative cross-border payments network for Bank of America Corp., the World Bank, and other global institutions. “The move would show the technology can work in the real world and not just the laboratory.”