sometimes garners large headlines. but from the standpoint of analysis, the “ currency ” or asset at the center of some of these systems is not backed by other secure assets, has no intrinsic value, is not the liability of a regulated banking institution, and in leading cases, is not the liability of any institution at all. indeed, how to treat and define this new asset is complicated. 3 while these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide - scale usage. risk management can act as a mitigant, but if the central asset in a payment system cannot be predictably redeemed for the u. s. dollar at a stable exchange rate in times of adversity, the resulting price risk and potential liquidity and credit risk pose a large challenge for the system. during times of crisis, the demand for liquidity can increase significantly, including the demand for the central asset used in settling payments. even private - sector banks and certainly non - banks can have a hard time meeting large - scale demands for extra liquidity at the very time when their balance sheets may be in question. moreover, this inability to meet the demand for extra liquidity can have spillover effects to other areas of the financial system. earlier in our history, the united states frequently witnessed bank runs that severely disrupted financial and economic activity, an example of what can happen when people lose faith in a payment system. in response, congress ultimately introduced both a central bank and deposit insurance programs to help regulate fluctuations in the supply of liquidity in order to keep prices stable. without the backing of a central bank asset and institutional support, it is not clear how a private digital currency at the center of a large - scale payment system would behave, or whether the payment system would be able to function, in times of stress. 3 / 5 bis central bankers'speeches central - bank - issued digital currency given that privately developed digital currencies may raise important financial stability issues tied to the value of the asset, some have argued that central banks should begin to issue their own digital currency as a 21st century analogue to paper currency. i would urge caution, particularly for countries like the united states with highly developed banking systems and ongoing robust demand for physical cash. as a practical matter, i believe that consideration of a central - bank - issued digital currency to the general public would require extensive reviews and consultations about legal issues, as

as smartphones and tablets, have become common - place. • people do not just connect and surf from their home computers anymore – they also do so from their mobile devices, while on the go. this has profound implications for how financial services are offered and consumed. second, mobility of ideas. • today, online platforms provide a variety of social networking and peer - to - peer services. and people are increasingly comfortable using these services. bis central bankers ’ speeches • these services have compressed time and space : interaction is real - time and information exchange transcends physical boundaries. • they allow information, knowledge and ideas to be shared widely across communities and geographies. third, mobility of payments. • in the past, it used to take several days and cost quite a bit to pay someone in another country or currency. • today, online payment services have made it possible for people and businesses to transfer funds safely at very low cost. • this has not only allowed e - commerce to flourish, but also enabled faster and more efficient cross - border financial services, like lending and borrowing. we are looking at a financial services industry that will be increasingly driven and powered by technology. the big trends in technology affecting finance what are the big trends in technology affecting the financial industry? let me cite six technologies that appear potentially transformative : • digital and mobile payments • authentication and biometrics • block chains and distributed ledgers • cloud computing • big data • learning machines first, mobile and digital payments. payment services are increasingly being enabled by mobile applications and near - field communications ( nfc ). • gone are the days of the clunky cash register. • today, accepting payments can be as simple as attaching a small dongle, no bigger than a matchbox, to a tablet or smartphone. this is only the beginning. • payments at stores and restaurants may increasingly not even require physical touch points, and could take place entirely over the internet, using the customer ’ s smart device to effect payments. • further out, we can look to a future of seamless payments, where technology automatically recognises the customer, checks out the goods, and charges to the customer ’ s account as he walks out of the store. second, authentication and biometrics. authenticating one ’ s identity is critical to gaining access to a variety of financial services and performing many financial transactions. as authentication technology progresses, we can look forward to more secure and efficient solutions to authenticate identity. biometric authentication