The number of financial institutions exploring blockchain potential just keeps on growing. Finland’s central bank is the latest institution to acknowledge the potential of distributed ledgers. They have also organized a seminar on blockchain technology in various sectors of our society–an exciting development, but which blockchain will they use?
Proprietary Blockchains Are Not The Solution To Save Finance
Not too many details are known related to the blockchain plans by the Finnish central bank right now. For example, no one knows what type of blockchain the bank envisions, and whether or not it will be yet another private affair. Proprietary ledgers accessible by a select few partners will not solve the issues of traditional finance but only compound them.
During the seminar organized by Finland’s central bank and the local Ministry of Finance, ten different blockchain-based technologies have been presented. All of them will use distributed ledgers to address specific industry needs. Not all of these concepts are related to finance or public administration, albeit those two sectors are prone to disruption above any other.
The primary objective of this blockchain event was to open discussions related to the technology itself. Moreover, bringing together industry leaders in the domestic market can only lead to the creation of new applications and concepts. It is also likely that Finland will introduce some official regulatory guidelines for blockchain development, although that has not been confirmed just yet.
What is rather intriguing is how the central bank may have unveiled their blockchain plans, but they are not the first in Finland to do so. In fact, government agencies, universities, and research institutes have also shown an interest in DLT in the past. They were all well-represented during this event, and actively engaged in discussions and conversations.
Governor Erkki Liikanen explained the purpose of this event as follows:
‘Our task is to ensure the reliability and efficiency of the payment system and the overall financial system and to participate in their development. Research into, and support of, new innovations shaping the financial sector constitute part of this work.’
It is evident that the Bank of Finland wants to position itself as the “central overseer’’ of blockchain technology in the country. That in itself is the wrong way to go about things, as blockchain technology is all about decentralization and distribution. There is no need for any central party or authority to oversee things by any means.
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