balanced view of expeditious disruption and long - term sustainability is merited. so where does that leave us? ultimately, i believe that advances in technology have the potential to drive efficiency gains in finance, just as technological innovation has done for centuries. while there are certain services emerging through defi that cannot be provided by centralized finance, the technological innovations stemming from defi are largely complementary to centralized finance. they have the potential to improve centralized finance, thereby increasing the significant value that financial intermediaries and centralized financial markets deliver. i look forward to seeing the continued evolution of financial technology and the benefits that evolution will bring to the households and businesses served by the financial system. 1 i would like to dedicate these remarks to an old friend and longtime participant of this conference, paul klein, who passed away unexpectedly two months ago. the views 4 / 5 bis - central bankers'speeches expressed here are my own and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. 2 see ariel rubinstein and asher wolinsky, " middlemen, " the quarterly journal of economics 102 ( august 1987 ) : 581 – 93, https : / / academic. oup. com / qje / article - abstract / 102 / 3 / 581 / 1887969. 3 see benjamin bromberg, " the origin of banking : religious finance in babylonia ( pdf ), " the journal of economic history 2 ( may 1942 ) : 77 – 88. 4 see national aeronautics and space administration, " spinoff from a moon tool ( pdf ), " january 1, 1981. 5 see christopher j. waller, " thoughts on the crypto ecosystem " ( speech at global interdependence center conference : digital money, decentralized finance, and the puzzle of crypto, la jolla, ca, february 10, 2023 ). 5 / 5 bis - central bankers'speeches

paradigm of fin - tech and to chart out the best way of using it. 5. technology has thrown several gauntlets simultaneously on to the banking and financial sectors in recent times. i would like to highlight five of them. 6. first is the cyber security. banks deal with hard cash and money and therefore have always been targets of crime ; while the banks make good use of it for protecting cash and money, ironically use of it by criminals have also increased substantially. today, it systems of banks are the prime target for cyber crimes and if one were to judge by the volume and value of incidents, the menace is steadily growing. it is of great concern – some of the recent incidents at bangladesh bank and several persistent instances in many banks are just the proverbial tip of the iceberg. if we need to provide safe and secure banking, then providing for safe it systems is an undeniable requirement. it is essential that in every it based initiative, security is addressed as a vital component. banks need to bestow greater attention on cyber security. the role of the chief information security officer ( ciso ) assumes great significance. it is heartening to note that all banks have a well anointed set up in the ciso. as i mentioned earlier, criminals have become it savvy ; cyber attacks are becoming highly sophisticated, use specialized analytical techniques and exploit minute vulnerabilities which had hitherto gone unnoticed. continued vigilance and concerted bis central bankers ’ speeches proactive protective actions are warranted. we have a ciso forum under the aegis of the idrbt ; this forum, along with the ongoing research in idrbt in cyber security should help banks exchange information, react quick enough to outsmart the perpetrators of cyber incidents and build in workable security related enhancements. 7. second are the new technologies that are fast developing. one of the important characteristics of the it world is that it is ever changing and dynamic. cloud based computing, block chain processing technologies and virtualization of it systems are a few examples which hold potential for being used in a big way. the fruits of these would be in the form of safe, trackable and secure digital currency, distributed ledger - keeping and homogenous it systems – all of which would ultimately result in better customer service. banks and idrbt can work together to study these, test them out and adapt for best use. 8. third are the fin tech companies – the new,