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So-called Fintechs typically use advances in technology to
provide cheap and easy-to-access services, from transfers and
trading to crowdfunding, operating largely outside of banking
regulations.
"Getting a clearer picture of fintechs' business activities is
essential if we are to better understand whether and in what way
they might pose a threat to financial stability," said Weidmann,
who sits on the European Central Bank's Governing Council.
"Many believe the most disruptive potential is to be found in
blockchain or distributed ledger technology, which promises to
allow payment transactions and securities settlement to bypass
banks and central counterparties altogether," he added.
Originally developed for the bitcoin virtual currency,
blockchain technology uses a decentralized network of computers
to verify transactions and may over time play a role in speeding
up clearing and settling, reducing the need for intermediaries.
Looking to react quickly, the Bundesbank recently launched a
project with Deutsche Boerse to develop its own blockchain-based
prototype of a securities settlement system.
Weidmann said advances in digital finance had increased consumer
access to financial services, but expressed concerns over how
fintechs would behave in an economic downturn.
He said assessing the risk was impossible without reliable data.
(Reporting by Balazs Koranyi; editing by Richard Lough)
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