The rapid evolution of financial technology promises to offer many consumers wider access to better services, but it also raises the stakes for regulators and supervisors.
And while most fintech firms are small, they can grow quickly, and may raise risks for people, companies and industries—as the recent collapse of a major crypto firm shows.
We explore fintech’s various dimensions in a recent podcast series, which showcases how IMF research and policy recommendations are helping to advance the global conversation around these complicated and consequential issues.
Our series charts how technology-driven innovation, including blockchain, offers benefits such as increased efficiency, competition, and choice. Some of these advances, though, remain untested and could spark new financial stability risks.
Here’s how the five episodes of our new podcast series, featuring voices of leaders from across the Monetary and Capital Market department, expands on all things fintech:
1. Fintech as the Future of Finance focuses on the revolution in the global financial system, from the Bahamas introducing a central bank digital currency, the Sand Dollar, to El Salvador and Central African Republic adopting Bitcoin as legal tender.
2. Central Bank Digital Currencies covers the benefits, challenges, and policy considerations around these instruments, which have been adopted or explored by more than 100 countries. CBDCs have advantages over cash, including promoting financial inclusion due to their potential to reach people who don’t have bank accounts, and lowering transaction costs for cross-border payments.
3. Fintech and Financial Stability explores how crypto assets and equity markets, which showed little correlation before the pandemic, since began to move much more closely together. Importantly, crypto is no longer on the fringe of the financial system, and greater interconnectedness with other assets could facilitate the transmission of shocks and could be destabilizing for financial markets.
4. Regulating Fintech establishes how regulation isn’t intended to stifle innovation, but rather to protect consumers and investors. Without it, fintech could fuel risks that could potentially even threaten the stability of the financial system itself.
5. Fintech in the FSAP goes behind the scenes of our Financial Stability Assessment Program, a comprehensive look at potential systemic risks, and details how fintech has come to figure ever more prominently in these regular evaluations.