The 90 central banks gathered in Washington to discuss the blockchain: "What does all this mean?

The importance of the blockchain is gradually emerging as central banks have become interested in it, including whether digital currencies should be introduced.

From June 1st to 3rd, representatives of central banks and regulators from 90 countries including China representatives gathered at the Washington Federal Reserve headquarters to attend the 16th International Conference on Financial Industry Policy Challenges. The meeting lasted for three days. A report on blockchain technology was held once a year. The conference was co-sponsored by the World Bank, the International Monetary Fund, and the Federal Reserve.

The theme of this year's conference is "Finance in Flux: The Technological Transformation of the Financial Sector". The conference included Federal Reserve Chairman Yellen and officials from the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements.

According to the World Bank website, two representatives of the China Banking Regulatory Commission and a representative of the People's Bank of China were invited to attend the conference, including Liao Wei, Director of the Shanghai Regulatory Bureau of the China Banking Regulatory Commission. There are also two representatives from Hong Kong, China.

According to the agenda published on the World Bank website, the theme of the event was based on blockchain and financial technology. At the meeting, representatives from various countries gave a detailed introduction to their progress in the exploration of blockchain and digital currency technology in the past year, and proposed the problems encountered in their respective explorations for discussion.

The analysis pointed out that at the high-level meeting, the representatives of the 90 central banks discussed the blockchain for the first time in history, thus highlighting the importance of the blockchain has been recognized by financial regulators.

According to Bloomberg, Perianne Boring, founder and chairman of the Chamber of Digital Commerce in Washington, supported the conference's blockchain agenda. After the group meeting of Boring, Bloq founder Jeff Garzik, NASDAQ Vice President Fredrik Voss and Goldman Sachs Executive Director Tom Jessop., Adam Ludwin, CEO of San Francisco-based blockchain startup Chain, was at the meeting. He gave a keynote speech and introduced blockchain technology to more than 90 central bank representatives and their potential in the financial sector.

“The real golden opportunity, the direction that should be worked hard is the central bank digital currency.” Ludwin said at the conference: “In the infrastructure phase, the government is almost always the creator and supporter of technology to play a leading role.”

In an interview with Bloomberg, Ludwin said that central bankers have asked many "sharp" questions about the blockchain topic. He said: "They don't want to challenge this technology, but want to understand 'all this means what?'"

Bloq co-founder Matthew Roszak said that many participants seem to be interested in the way the blockchain improves the way the organization operates. “They understand what blockchains can and can't do. They see blockchain as a tool to improve their work, they are responsible for central bank policy decisions, and blockchain technology provides unprecedented transparency and openness.”

Boring said that central bank leaders have raised many high-level issues, especially around emerging markets. These issues are derived from institutions in Africa and South America and indicate close attention to the impact of blockchain and digital currencies in global competition.

It is noteworthy that the Asian Central Bank expressed concern about the true identity of Ben Bitong, the anonymous creator of Bitcoin.

Boring said: "It is really difficult for them to trust the system of unknown creators."

One of the most important features of the blockchain as the underlying technology of Bitcoin is its claimed security. After several large central thefts this year, central banks have added another reason for interest in blockchain technology.

In February of this year, the Bangladeshi central bank’s foreign exchange reserve bank account was hacked and stolen nearly $100 million. According to the BBC, after hackers invaded the Bangladesh central bank network, dozens of transfer applications were issued. The spelling mistakes of the payee caused the attention of the transit bank Deutsche Bank, and then asked the central bank of Bangladesh to verify the information, the latter perceived that the account was stolen and immediately stopped the transaction. Almost at the same time, the Federal Reserve Bank of New York also issued an alert to the Bangladesh Central Bank regarding suspicious applications for transfers. It is alleged that if the application was granted at the time, the amount of theft could be as high as $1 billion.

In addition, Vietnam’s Vanguard Bank, located in Hanoi, Vietnam, said on May 15 that it had defeated a hacker attack in the fourth quarter of 2015 to try to use the fake Global Banking Financial Telecommunications Association (SWIFT) information to steal $1.1 million from the bank. Behavior, modus operandi is similar to the case of the Central Bank of Bangladesh.

Banco del Austro, a commercial bank in Ecuador, was also hacked in January 2015 and was stolen for $12 million.

These attacks against banks were conducted through intrusion into the banking network and exposed the vulnerabilities of the SWIFT system.

According to the analysis of various circles, blockchain technology can prevent such hackers. Because unlike SWIFT, the banking system running on the blockchain will not be compromised on a certain node because the system is running simultaneously on all computers connected to the blockchain globally.

Shen Tuchun, deputy secretary-general of the Financial Blockchain Cooperation Alliance and CEO of Shenzhen Silver Chain Technology Co., Ltd., said that if blockchain technology is used, the security of the banking system will be greatly improved, at least no centralized database will be tampered with. In the case, after the funds are stolen, it will not be as difficult to recover as it is now. Since the balance and transaction records of each account are traceable in the blockchain-based digital currency system, it will also make great achievements in anti-money laundering.

At present, the Chinese central bank's attitude toward digital currency is relatively positive. In February of this year, Zhou Xiaochuan, the governor of the central bank, said in an interview that the central bank began to study digital currency very early. "As the currency of the previous generation, the technical content of banknotes is low. From the perspectives of safety and cost, new technologies and products are being used. Replacing is the trend of the times. Especially with the development of the Internet and the payment methods on the global scale, the establishment of digital currency issuance and circulation system is very important for the construction of financial infrastructure and the promotion of economic upgrading and efficiency improvement. necessary."

Shen Tuchun believes that if the central bank wants to issue digital currency on the blockchain basis, it must first develop a mature technology platform, which will be launched in two or three years. Another problem to be solved is the interest of the central bank and commercial banks.

"The central bank's issuance of digital currency is definitely not for the sake of the commercial bank. They will definitely find their own positioning and responsibilities in the new system. The whole set of issuance process and their respective responsibilities will be clearly defined before they will be issued. The central bank is based on the blockchain. The issued digital currency is expected to be piloted in a small scale within three to five years, and then gradually improve the blockchain technology level and add more business." Shen Tuqing said.