Monday, June 24, 2019

The BIS Talks Fintech, Big Fintech, and Corporate Crypto

This is about as topical as it gets.
From FT Alphaville:

A pound of flesh for your Libra inclusion
The Bank of International Settlements (BIS) has just released its annual economic report and this year it features a special chapter on the entry of big tech into finance.

The chapter couldn't be more topical, says BIS economic adviser and head of research Hyun Song Shin.

“We chose the right week to launch our chapter,” Shin notes in reference to the launch of Facebook's Libra coin last week.

But while it would be tempting to linger on BIS views about Facebook's audacious plans to literally almost take over money, that would be to overlook some of the more nuanced but equally important views about fintechs in general.

The report's key point is that the entrance of big tech into finance promises all sorts of efficiency and financial inclusion gains — which is a good thing — but those gains mustn't come at the cost of other things like privacy, financial stability and market competition.

To wit, there's an implicit suggestion that the regulatory landscape needs to change to address these new multi-faceted issues. It comes by way of this regulatory compass which shows how three core regulatory issues intertwine in the presence of big tech in finance: 1) Financial regulation. 2) Competition regulation. 3) Privacy....