Dutch Central Bank executive wants to push for new technologies

Dutch Central Bank executive wants to push for new technologies

According to Petra Hielkema, an executive at the Dutch Central Bank, De Nederlandsche Bank (DNB), it is essential that central banks across the globe begin experimenting with and investigating emerging technologies as part of a process to improve efficiency and promote greater security. This is essential, according to her, for banks to deploy the latest in technology as part of their new strategies over the next three years.

Hielkema explains that there are new technologies out there that could serve the banking industry well. This includes such things as artificial intelligence and blockchain technology, each of which can be utilized safely and effectively.

The central bank of the Netherlands is already experimenting with blockchain technology but has not had a great deal of success. Hielkema explained that there are a number of problems that have been exposed through the use of this technology. Through the first three years of implementation, there were a number of issues that arose, including shortages and capacity, inefficiencies that were caused by high energy consumption across networks and, the biggest of all, uncertainty as to whether a payment actually completed through the process.

These are obviously not the kind of problems that a bank can allow. Services cannot be shut down due to problems with energy consumption, and transactions need to occur and be recorded accurately, yet, the executive rightfully suggests that the banking industry must embrace these new technologies if they are going to continue to thrive in the upcoming years.

Hielkema has not been afraid to speak out on important issues before. In 2018, she said cryptocurrencies are not a valid form of money. However, despite her rhetoric, banks have shown no desire to ban these currencies or two forbid customers from dealing in them. It appears she may be right about the technology, but is far off the mark when it comes to digital currencies.

Yet, there are those in the Netherlands who agree with her. Last June, the Authority for Financial Markets (AFM) in the Netherlands expressed what they referred to as “serious doubts” as to whether financial institutions in the Netherlands were able to deal in cryptocurrencies yet still conform to licensing laws. The AFM warned these companies that they were putting themselves at risk of meeting their licensing obligations by dealing in cryptocurrencies.

While there may be some doubts about cryptocurrencies in the Dutch financial industries, there appears to be widespread support for the idea of expanding the technology into the banking industry. Hielkema is quite accurate in her assessment that if the central bank is going to have any kind of supervision over financial markets and trading services, they must be able to understand the technology involved. “Understanding is also critical to being able to effectively supervise these new initiatives.”

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.