world. 9 around the world, 1. 7 billon adults are unbanked or underserved with respect to financial services. 10 in many countries, fintech is already helping the unbanked and small businesses to access finance. from rural households in china, who can invest in a money market fund on their smartphone, to retailers in india, who can accept new forms of payments from their customers. in advanced economies, as well, consumers stand to benefit. new market entrants can offer innovative services efficiently thanks to fully digital business models and 6 see frost j., shin, h. s. and wierts, p. ( forthcoming ). 7 see financial stability board ( 2019 ), “ regulatory issues of stablecoins ” ; g7 working group on stablecoins ( 2019 ). 8 see financial stability board ( 2017 ), “ financial stability implications from fintech, supervisory and regulatory issues that merit authorities ’ attention. ” 9 see bank for international settlements ( 2019 ), “ welfare implications of digital financial innovation. ” 10 world bank ( 2019 ). the use of latest technologies. they also stimulate incumbent entities to invest in modernising their services. 11 regulatory reforms are also contributing to this. in europe, psd2 enables third - parties to access payment - related data previously only available to banks. consumer consent is of course required. in the netherlands, new and innovative services are starting to emerge in areas such as payments and personal finance management. these are offered by new entrants, banks, or through partnerships. of course, customers have to trust these new services. the combination of payment data with large volumes of personal data in particular could lead to privacy concerns among the general public. a recent survey carried out by de nederlandsche bank shows that, on average, 11 percent of respondents are willing to give consent to various forms of data usage. nearly 72 percent are not prepared to do so. and more than 59 percent of the respondents would be more inclined to allow a bank more active use of payment data than they would a tech company. 12 this makes public trust an asset of great value for the banking sector at this juncture. but it remains to be seen how these developments will impact the banking sector in the longer run. 13 let ’ s look at the risk side of the equation. despite their innovative character, fintech activities remain subject to traditional risks. 14 activities that resemble deposit taking remain subject to liquidity mismatches and the potential

with an associated material effect on the provision of financial services. notably, this can include innovation by new firms, existing technology firms, and incumbent financial institutions. 2 see frost j., shin, h. s. and wierts, p. ( forthcoming ), “ an early stablecoin? the bank of amsterdam and the governance of money ”, bis working paper. 3 see g7 working group on stablecoins ( 2019 ), “ investigating the impact of global stablecoins. ” 4 see van nieuwkerk, m. van ( 2007 ), “ hollands gouden glorie, de financiele slagkracht van nederland door de eeuwen heen. ” 5 see kindleberger, c. and aliber, r. ( 2005 ), ‘ manias, panics and crashes : a history of financial crises ’ ; schnabel, i. and shin, h. s. ( 2018 ), “ money and trust : lessons from the 1620s for money in the digital age ”, bis working paper no. 698. to restore confidence, the bank of amsterdam started issuing money in the form of bank deposits – the bank guilder. on the liability side of the balance sheet, the bank held current account deposits, with balances rising from 4. 9 million guilders in 1673 to 28. 9 million in 1721. on the asset side, the bank ’ s charter required that deposits were fully backed by precious metals. this boosted confidence, much like current stablecoin proposals aim to achieve price stability by being pegged to a basket of fiat currencies. in his seminal work, the wealth of nations, adam smith noted : at amsterdam, no point of faith is better established than that for every guilder, circulated as bank money, there is a correspondent guilder in gold or silver to be found in the treasure of the bank. the city is guarantee that it should be so. the bank of amsterdam supported payments and settlements across europe for nearly two centuries. it relied on an ‘ ecosystem ’ of cashiers, provided standard contracts and managed operational risks, such as a fire in 1652 – cyber - attacks had yet to be invented. similar to modern wholesale payment systems, the bank was able to bridge differences between outgoing and incoming payments. but in doing so, the bank ’ s management also departed from the strict application of its charter, performing some of the liquidity provision functions