The COVID19 crisis has accelerated and intensified the digitalisation trend that was already observed prior to the pandemic, reinforcing pre-existing trends around the greater use of digital financial services and suggesting further growth potential for these markets.
The increased use of digitally-enabled financial services has helped economies avoid a complete standstill during the pandemic and has the potential to support a digitally-enabled recovery, improve economic resilience in times of stress, and foster financial inclusion. At the same time, the deployment of innovative technologies in finance gives rise to new overriding challenges and risks, and could amplify risks already present in financial markets.
Building on the work of the Committee on Financial Markets’ Experts Group on Finance and Digitalisation, as well as on the blockchain centre forum and project, this Symposium aims to share knowledge about developments and policy frameworks around the use of financial technologies - including the blockchain - in finance, in order to harness benefits while addressing risks, as well as to disseminate good practices in the Asian region and beyond.
The Symposium brings together high-ranking officials from finance ministries/treasuries, central banks and securities regulators from Asian and OECD member countries, as well as experts from international organisations, private sector representatives and academics.
This event was sponsored by the Government of Japan.
Download the agenda
DAY 1 - FRIDAY 24 September 2021
SESSION 1: Central Bank Digital Currencies (CBDC): latest developments and design considerations
Central banks are actively researching the benefits and drawbacks of offering a digital currency to the public through the issuance of central bank digital currencies (CBDC). CBDCs, as any payment service, should be appropriately supervised and regulated to address challenges and risks related to financial stability, consumer protection, privacy, taxation, cybersecurity, operational resilience, money laundering, terrorist and proliferation financing, market integrity, governance, and legal certainty.
The understanding of CBDCs has advanced significantly in the last few years through published research, policy work and proofs-of-concept from central banks at national level and through global cooperation consortia or hubs established across the world. Yet, still a lot of issues remain to be explored by policymakers.
This session discussed progress made around CBDC design considerations and practical examples of pilots undertaken, and touched upon areas which remain to be addressed and associated policy considerations.
SESSION 2: Artificial Intelligence (AI) in Finance
Global spending on AI is forecast to double over the period 2020-24, growing from USD50.1bn in 2020 to more than USD110bn in 2024. Growing AI adoption in finance is enabled by the abundance of available data and by more affordable computing capacity, and is expected to be increasingly a driver of competitive advantage for financial firms by creating efficiencies and enhancing the quality of financial services offered to consumers. At the same time, the deployment of AI in finance could amplify risks already present in financial markets and give rise to new challenges and risks.
This session explored how the deployment of AI in finance is expected to affect financial market activity in Asian markets and beyond; whether and how it will affect authorities’ ability to monitor and assess new types of emerging risks; and high-level policy recommendations to address such risks.
DAY 2 - FRIDAY 1 October 2021
SESSION 3: Decentralised Finance
09:00-10:15 CEST (Paris) / 16:00-17:15 JST (Tokyo)
Decentralised Finance or ‘DeFi’ is the latest development in the crypto-asset space, and promises to replicate the traditional financial system in an open, decentralised, permissionless and autonomous way, through applications built mainly on the Ethereum blockchain network. The total value of crypto-assets locked in DeFi applications as of 31 March 2021 reached USD42.9bn up from USD1.9bn on 2 July 2020 (c. 2,150% increase, albeit from a very low base).
The DeFi space is worth delving into due to its rapid growth within the volatile crypto-asset markets, use of leverage, and attraction of an increasing number of largely unprepared retail investors, exposing them to high risks. Also, as crypto-asset activity is increasingly becoming mainstream, the boundaries of the two systems become more porous. Increased interconnectedness of DeFi with traditional financial markets may give rise to potential risks of spillovers to the markets and the real economy.
This session discussed the evolution of DeFi and its mechanics with a view to better understand its activities, structures, potential benefits and underlying risks, as well as initial key considerations for policy makers in Asia and beyond.
SESSION 4: Asset tokenisation: latest trends in policymaking
Asset tokenisation enabled by distributed ledger technologies (DLTs), mostly theoretical just a few years ago, is now a reality with successful pilot projects around the globe. The rise of tokenisation presents significant opportunities for increased market efficiencies and inclusion (e.g. securities issuance, trading, clearing and settlement), but also raises questions about the role of financial intermediaries and the overall structure of the financial markets.
This session discussed how regulators and policymakers in Asian markets and beyond have been approaching the rapid expansion in the global use of tokenised assets, and the range of policy responses to emerging issues in this nascent market, including areas that may warrant further attention from policy makers.
DOCUMENTS AND LINKS
Deputy Head of the Financial Markets Division
Policy Analyst, Financial Markets Division