Jon Cunliffe, Deputy Governor of the Bank of England, told a conference organized by financial sector organization AFME that the use of Blockchain technology, which underpins crypto assets, to enable fast trading and settlement across all financial markets is not desirable given the problems it would bring.
According to Cunliffe, it remains important to ensure that trading and settlement innovations are as robust in the eyes of regulators as the current system.
Cunliffe summarized:
“There is simply no time to identify or rectify errors before they are actioned. In short, we may not want wholly instantaneous trading and settlement in all markets. Currently, stock and bond transactions are settled two business days after the transaction. This results in risky exposures and the possibility of significant market movements in the interim, which banks are required to cover with cash for margin and capital.”
