Fintech and Financial Stability

The first edition of the new IMF/JVI course on Fintech and Financial Stability took place between November 16-20, 2020. In view of the ongoing pandemic, the course was held in virtual format with 20 participants.

The aim of this course was to provide a structured overview of the range of Fintech developments in general and across the JVI region, identifying opportunities for financial development as well as financial stability challenges from a public policy perspective. It aimed at providing a platform for exchange on the ways forward towards mobilizing domestic supervisory and regulatory resources in an inclusive, sustainable and effective way.

More specifically, the course covered developments and regulatory responses related to crypto assets and stablecoins, central bank digital currencies (CBDC), financial market infrastructures (FMIs), and Bigtech (see below). It started by introducing a taxonomy of Fintech and presenting stylized facts about the Fintech activities and developments in Central, Eastern, and Southeastern Europe as well as Central Asia and the Caucasus. This was followed by discussions on crypto-assets and stablecoins, looking in particular at the associated regulatory challenges including the lack of reliable data, the need for sufficient supervisory resources, and still limited international standards. CBDCs are another increasingly important aspect of Fintech, although most countries in the JVI region are not yet actively exploring CBDCs or planning to issue CBDCs in the near future. The discussion on Fintech applications to financial market infrastructures looked at the potential benefits and risks of decentralized ledger technology (DLT) and big data analytics, including DLT-enabled innovations in settlement and asset transfers, data and identity management, as well as regulatory reporting. Finally, the course looked at Bigtech, global online and mobile service providers with dominant market shares and a vast customer base. In recent years these companies ramped up their financial service offerings globally, which offers benefits (innovation, higher efficiency, inclusion), but raises also operational and concentration risks as well as broader financial stability concerns.

In 2021, JVI envisages to offer the course face-to-face. In case of continued travel restrictions, a shorter online version will be offered. You can review the course description and register online on the JVI website.

Reiner Martin, Lead Economist, JVI