Few issues in central banking are more likely to provoke anxiety than the fear of losing control of one’s currency. The past few days have provided another perfect illustration of this point. On Monday the Chinese central bank banned initial coin offerings of bitcoin-type currencies, leading to a fall in the value of some cryptocurrencies of as much as 20%. Behind the scenes, there is growing uneasiness about how disruptive technology may be to the banking and payments system. Over the northern summer both the Basel Committee on Banking Supervision and the World Economic Forum (WEF) put out lengthy papers on their concerns and the state of play. So far, the big winners from new technology have been clients. Fintech innovators in banking appear to have been less disruptive than expected because they have largely failed to change the basis for competition in such a regulated industry, the WEF report argues. Instead, technology has led to a marked improvement in customer service and a ...

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