* BoC currently working on blockchain payment system
* Regulators must seek global co-ordination -Wilkins
* Wilkins urges balance between innovation and risk
OTTAWA, Feb 21 The Bank of Canada is open to
doing more financial technology experiments like the one it is
currently conducting on a blockchain-based payment system,
Senior Deputy Governor Carolyn Wilkins said on Tuesday.
Speaking at a conference on financial technology innovation,
Wilkins said regulators are wrestling with how to craft policy
that will harness the benefits of innovation while also
protecting and managing the potential risks to the financial
system and consumers.
The central bank is currently working on "Project Jasper", a
blockchain experiment launched last year as a joint initiative
between the central bank, Payments Canada and R3, a consortium
of the world's largest financial institutions, including
Canada's biggest banks.
"Project Jasper (is) something new for the Bank of Canada
and it is one of the most productive experiments that we've
had," Wilkins said. "We're certainly open to doing more of
One place to start is focusing on the incentives that drive
corporate decisions, where those risks need to be managed
through regulation and where the private sector can be left
alone, Wilkins said.
Regulators must also look at how to coordinate across Canada
and globally, said Wilkins, though she acknowledged different
regulators may have different risk tolerances.
"Certainly we know if risk tolerance is zero, there's going
to be no benefits to innovation."
Wilkins said in an article published earlier this month that
the blockchain experiment, which will run until later this
spring, had shown how the technology would have to improve in
order to surpass the Large Value Transfer System that is
currently used in Canada for electronic wire transfers of large
sums of money.
Used to underpin digital currencies like bitcoin, blockchain
is a distributed record of data or transactions, maintained by a
network of computers without the need for approval from a
(Reporting by Leah Schnurr; Editing by Bernard Orr)