Bank of Canada: Blockchain Will Not be Able to Replace the Traditional Financial System
According to representatives of the Central Bank of Canada Carolyn Wilkins, distributed ledger technology will never replace the existing payment infrastructure.
According to her, blockchain technology, perhaps, may be the basis of payment system of the country, however, identified in experiments it has shown that in this way there remain too many barriers.
"We came to the conclusion that an independent system, created solely on the basis of distributed registry technology, is unlikely to be compared in terms of its efficiency and benefits with a centralized system. And frankly, there are fundamental disagreements between the centralized interbank payment system that we have now and the decentralization inherent in distributed registries, "Carolyn Wilkins wrote.
Among the obstacles to the implementation of the block, she refers to such aspects as data confidentiality due to the risk of a single point of failure in the system, and limited bandwidth.
"Scalability is still a problematic place in some distributed systems. While other versions, abandoning the completely decentralized structure, demonstrate a higher transaction processing speed, the use of distributed systems can reduce fault tolerance and not justify the expected cost reduction, "Wilkins added.
In the summer 2016, the Bank of Canada launched a project to investigate the underlying technology of bitcoin. The initiative called Project Jasper is implemented with the participation of such large banks as Bank of Montreal, CIBC, Royal Bank of Canada, Scotiabank and TD Bank, and work is also under way on the CAD-coin-digital version of the Canadian dollar.
Nevertheless, some of the developments under this initiative can be used in the future, especially as, as Carolyn Wilkins emphasized, Canada's payment infrastructure needs modernization, and this should be done in a short time.