## The Impact of Fintech on Central Bank Governance: Key Legal Issues

_FinTech Notes, August 24, 2021_

## Source details

**Canonical URL:** [The Impact of Fintech on Central Bank Governance: Key Legal Issues](https://www.imf.org/en/publications/fintech-notes/issues/2021/08/24/the-impact-of-fintech-on-central-bank-governance-463625)

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## Bibliographic details
- Authors: Marianne Bechara, Wouter Bossu, Yan Liu, Arthur D. P. Rossi
- Published: August 24, 2021
- Series: FinTech Notes
- DOI: https://doi.org/10.5089/9781513592473.063

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### Summary
- Fintech offers opportunities for central banks to enhance execution of core functions, such as currency issuance and payment systems.
- Fintech also poses major challenges to the legal foundations of central bank governance.
- Historical context: central banks have led past transformative innovations (banknote invention; payments via debits and credits in book-entry accounts; transitions of interbank payment systems from the telegraph to internet protocols).
- Current disruptive technologies highlighted: distributed ledger technology, new data analytics (artificial intelligence [AI] and machine learning), cloud computing, wider mobile access, and increased internet speed and bandwidth.
- Purpose: discuss the authors’ preliminary legal views on how central banks can best deal with fintech’s impact on their governance, based on a review of central banks’ reactions to date.

### Major Themes and Challenges
- Opportunities:
  - Enhance currency issuance processes.
  - Improve payment systems operations.
- Challenges:
  - Legal foundations of governance facing stress from fintech innovations.
  - Novel technologies (distributed ledger technology, AI and machine learning, cloud computing) introduce unprecedented legal and governance issues.
- Institutional context:
  - Central banks’ traditional role at the cutting edge of financial technology and innovation positions them both to benefit from and to be challenged by fintech.

### Purpose, Scope, and Approach
- Objective:
  - Present preliminary views, from a legal perspective, on central banks’ responses to fintech’s governance implications.
- Basis:
  - Review of central banks’ reactions thus far to fintech challenges affecting legal foundations of governance.
- Tone:
  - Preliminary; focused on legal analysis rather than operational or technical implementation roadmaps.

### Subjects and Keywords (as provided)
- Subjects: Central Bank digital currencies, Central bank governance, Central bank legislation, Central banks, Economic sectors, Financial crises, Financial markets, Fintech, Payment systems, Technology
- Keywords: Central Bank digital currencies, Central bank governance, central bank iLabs, Central bank legislation, collaboration arrangement, copyright page, Fintech, Global, oversight responsibility, Payment systems, publication order

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_Source: https://www.imf.org/en/publications/fintech-notes/issues/2021/08/24/the-impact-of-fintech-on-central-bank-governance-463625_