CBR: the development of fintech and cryptocurrency can bankrupt banks

The development of digital financial technologies, including Bitcoin and other cryptocurrencies, may have a negative impact on the financial position of banks. This statement was made by Deputy Chairman of the Central Bank of Russia Vasily Pozdyshev, reports TASS.

Speaking at the international conference “Deposit insurance and bank liquidation: standards, best practices and innovations”, he noted that the regulator cannot but respond to the growth of financial technology and the use of new technologies by large companies, as it creates a threat to the banking sector.

“I believe that the year 2019 is a turning point in the development of financial technology in the banking industry, this year the so-called bigtechs are large corporations that are already successfully operating in the area related to the provision of services on a high-tech base - they are seriously attacking the traditional banking model”, - Pozdyshev declared.

With the development of digital technology, the financial situation of traditional banks may deteriorate significantly, the representative of the Central Bank of the Russian Federation believes.

“A significant mass of small deposits, funds in the accounts, indeed, will come out of the deposit insurance systems. On the one hand, the base for deductions will be reduced, on the other hand, I fully assume that this may worsen the financial situation of the banks themselves, because these liabilities are the cheapest for the bank. This may increase the probability of bankruptcy of these banks, no one has yet appreciated the consequences of this, ”Pozdyshev emphasized.

Recall that in May, the head of the Bank of Russia Elvira Nabiullina said that the Central Bank of the Russian Federation opposes the introduction of cryptocurrency in the monetary system.
Added by: 4-07-2019, 13:54
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