The BoE says blockchain technology is not yet a critical infrastructure of the financial system. However, it is possible that some blockchains will.
In a post on its website published Wednesday (December 21), the Bank of England (BoE) said, “Blockchain does not (yet) constitute a significant financial infrastructure. , which may be the case in the future as interconnections with the broader financial system continue to develop.”
Commenting on the September Ethereum Merge, the BoE raised unanswered questions about the governance of permissionless blockchains.
It said the event posed a number of operational and technical risks. So I asked, “What if I’m wrong?” Who would have been responsible and had the authority to coordinate a timely resolution? [And] Who was accountable for the resulting financial loss suffered by others?”
With these issues in mind, the BoE believes that proper regulatory oversight should be arranged if blockchains like Ethereum become more entrenched in the financial system and count as critical infrastructure. said.
The latest post is consistent with comments Carolyn Wilkins of the BoE’s Monetary Policy Committee made in October.
Speaking to an audience at the Blockchain Technology Center at University College London (UCL), Wilkins warned of “serious governance deficiencies in the crypto ecosystem.”
Noting that many cryptocurrency projects allow anonymous voting and adhere to governance models that are most important to major shareholders, accountability and transparency in how blockchains are managed is not seen elsewhere. It said it did not meet the more regulated standards that apply in the United States.
Wilkins argues that as a potential way out of the predicament that does not unduly distort the decentralized nature of existing decision-making models in the cryptosphere, the broadly decentralized governance system applied by Polkadot and MakerDAO would be a good fit for the assigned technology. Pointed out how to maintain the emergency powers held by the Commission. .
Delegating specific powers to specific committees, as well as addressing the challenge of finding consensus among a decentralized bevy of token holders, could solve some of the accountability issues raised by the BoE. increase.
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