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Wednesday, Dec 10, 2025

Bank of England Governor Mark Carney says central banks won't be left behind by fintech

Bank of England Governor Mark Carney says central banks won't be left behind by fintech

Carney says the financial system is the most heavily regulated part of the economy and central banks must use its role to act as a guardian to risk.
As big tech firms muscle into the financial world, the governor of the Bank of England says he sees little risk that central banks will be left behind by new technology.

While admitting that central banks would not be “at the cutting edge of innovation,” Carney argued that institutions such as the Federal Reserve and BOE would be needed at the heart of efforts to ensure stability.

“That’s not hubris. The fact is that the financial system .... is the most heavily regulated part of the economy. That’s for a reason, there are lots of ways it can go wrong,” Carney said.

The central banker cited the example of the “huge advances” of financial technology (fintech) in China which has helped to create “one of the larger shadow banking bubbles in the world today.”

“Quite often a good idea leads to other issues which is why central banks and regulators have to be on top of them. And its why we have to look at them as a whole,” said Carney.

The U.K. central bank chief was speaking on an IMF panel moderated by CNBC’s Elizabeth Schulze in Washington on Wednesday.

Carney said one main role of central banks in the development of fintech would be to remove impediments to different parties, ensuring a “level playing field” so good ideas aren’t excluded.

Carney has appeared more open to Facebook’s libra cryptocurrency than other officials. He said on Tuesday that the digital token could help offer an alternative U.K.’s payments system, which he described as “slow and expensive.” As far back as June, Carney had said he was keeping an “open mind but not an open door” on libra.

The central banker has also proposed a virtual currency alternative to the dollar as the world’s reserve currency. Carney argued such a digital currency “could dampen the domineering influence of the U.S. dollar on global trade.”

Facebook’s plan is to create a cryptocurrency underpinned by a basket of global currencies. But central banks have been quick to ramp up their efforts in the digital asset space since Facebook announced libra back in June. The People’s Bank of China for instance has been racing to release a digital currency tied to the yuan, while the Swiss National Bank is exploring the use of digital currencies in trading.

The head of Sweden’s Riksbank on Tuesday told CNBC that libra has been an “incredibly important catalytic event,” incentivizing central banks to reform in order to reflect the digital age. The bank is looking to pilot a digital version of the Swedish krona this year.

Global monetary policymakers have also been wary of Facebook’s proposed libra currency. member Benoit Coeure last month warned the bar for approval when it comes to so-called stablecoins like libra “will be high,” while Chairman Jerome Powell raised “serious concerns” with the token and said the U.S. central bank has set up a working group to investigate it.
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