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Victoria Cleland, the BoE's Chief Cashier, said a priority for
the central bank this year was devising its regulatory approach
to so-called fintech.
It was looking at the risks and benefits of applications
including digital currencies and blockchain, a tamper-proof
shared ledger that can automatically process and settle
transactions using computer algorithms.
Cleland's reassurances over regulation come at a time when
British policymakers are looking for any signs that fintech
firms in London, which has become a global hub for the sector,
will move to mainland Europe.
Fintech firms have expressed worries they could be cut off from
the European Union market once Britain leaves the bloc. Berlin
has begun a marketing drive to attract fintech firms from the
British capital.
Cleland said firms in the fast-growing fledgling sector want to
know where the goalposts will be and the BoE was working with
them to "understand what the red lines would be".
"It's very difficult to decide how to regulate something you
don't quite know what it is," she told a conference on
peer-to-peer lending, adding fintech was a global industry and a
similar approach was needed by other regulators.
The Financial Stability Board, a global watchdog chaired by BoE
Governor Mark Carney, is looking at whether using blockchain for
processes such as settling transactions could undermine
financial systems and if any new rules are needed.
Last year alone, the alternative finance sector in Britain grew
by 84 percent, Cleland said.
The BoE has sought applications from fintech firms under its "FinTech
Accelerator" program to see how they could help with the central
bank's data and payments operations.
Cleland said this program would be extended in coming weeks with
a call for more applications.
(Editing by Alexander Smith)
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