- Circle has submitted a response to the Central Bank of Ireland highlighting the benefits of blockchain-based financial services for consumers.
- Public blockchains can increase competition and disaggregate financial services, benefiting consumer privacy and improving capabilities in the fight against illicit finance.
- Firms offering novel financial products should engage with supervisory authorities before a formal application.
Circle Recommends Central Bank of Ireland Adopt Public Blockchains
USDC issuer Circle has engaged with the Central Bank of Ireland to promote the benefits of blockchain for improved consumer protection. In its response to the discussion paper issued by the Central Bank, Circle offers recommendations on how financial supervisors can support innovation while ensuring that consumers‘ best interests are protected.
Benefits of Blockchain Technology for Consumer Protection
Public blockchains have numerous advantages in relation to consumer protection. These include increased competition, disaggregation of financial services, stronger privacy protections, more transparency through improved literacy, and regulators being able to track real-time blockchain transaction data. As an example, Circle cites how blockchain-based payment systems can help protect users‘ privacy by not accumulating proprietary stores of data like traditional banking systems do.
How Financial Supervisors Can Support Innovation While Protecting Consumers‘ Best Interests
Circle’s response outlines several ways that supervisors can ensure that innovation is supported while still protecting consumers. It recommends engaging with supervisory authorities before submitting a formal application for novel products; informing customers about market abuse or anomalies by monitoring and analyzing real-time blockchain data; and supporting digital literacy initiatives so that users understand how their data is used.
The use of public blockchains in consumer protection could bring numerous advantages to both consumers and regulatory bodies alike. By providing better access to information, increasing competition among providers, and enhancing consumer privacy protections, public blockchains could lead to greater trust in digital financial services overall.
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