The Payments Association (formerly The Emerging Payments Association), has launched an Innovation Hothouse Bridge, a discussion group to bridge the gap between established payment systems and blockchain based solutions.
The Payments Association will lead the initiative, joined by the Boston Consulting Group and paywith.glass, a Dutch-based fintech company working with artificial intelligence and distributed ledger technology.
In February 2022, the consortium will publish a green paper exploring multiple use cases across the digital currency landscape that could arise from the creation of a new digital currencies infrastructure for financial markets.
Currently financial processes ranging from retail payments to international trade and capital markets infrastructure have inefficiencies that can be solved through digital technologies, such as artificial intelligence, distributed ledger and smart contracts, says The Payments Association.
Although the proposed central bank digital currencies could solve these problems, their full implementations may be a decade or more away for most countries, so the question is how to make the most of the UK’s financial infrastructure during the interim period, between now and the implementation of fully digital currencies, the association adds.
Commenting on the new innovation consortium, Tony Craddock, director general at The Payment Association, says: “The UK will soon be entering a world where some countries are using digital currencies, much of the current financial infrastructure will soon be in place and consumers are using a mixture of traditional currency, cryptocurrency and stablecoins. Our aim with this project is to bring together a consortium of the best minds in payments to find the best way to link the old world and the new.”
Kunal Jhanji, managing director and partner at Boston Consulting Group, comments: “After the global financial crisis of 2007-2008, the creation and growth of blockchain solutions for payments, new data standards like ISO 20022, the increasing focus on the billions of unbanked people across the world, and the focus on reducing cash use since the pandemic, the financial world is in clear need of modernisation, and the UK can be leading this effort.”
He adds: “This consortium has the potential to be a stepping stone to a new world of financial technology that can enable change throughout the established world of finance.”
Image: metamorworks 