Klaas Knot: Risks and benefits of modern financial technology; Lessons from a 17th century stablecoin

Speech by Mr Klaas Knot, President of the Netherlands Bank, at the RiskMinds International seminar - day I: The Risk Regulation Summit, Amsterdam, 2 December 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Whether you are here today as a chief risk officer, regulator, academic or, as in my case, central bank governor, we all seem to be facing the same challenge: how can we find the optimal balance between risk and benefit, in an environment riddled with uncertainty?

Today, I want to talk about the risks and benefits of financial technology, or FinTech. And what better place to do this than here in Amsterdam? Silicon Valley on the southern shores of San Francisco Bay, the city of Shenzhen in the Chinese Pearl River Delta. They are well-known breeding grounds for the technology of tomorrow. But innovation is common to all ages. And right here in the city of Amsterdam, at the heart of the Amstelland river basin, important innovations occurred as early as in the 17th century.

Monetary history is rife with examples of innovations that challenged the status quo. The Bank of Amsterdam did exactly that in the early 17th century. In fact, a forthcoming research paper by the Bank of International Settlements and De Nederlandsche Bank considers the Bank of Amsterdam as an early instance of a stablecoin provider: an issuer of money backed by low-risk assets.