Blockchain Consensus Mechanisms: A Primer for Supervisors

January 26, 2022

Preview Citation

Format: Chicago

Parma Bains. Blockchain Consensus Mechanisms: A Primer for Supervisors, (USA: International Monetary Fund, 2022) accessed November 21, 2024

Summary

Technology plays an increasingly important role in financial services. With the pace of technological inno-vation moving ever faster, the role new technology plays in the provision of financial services is becoming increasingly fundamental. New technology can generate efficiencies for firms, lowering costs that can be passed on to end users. It can increase access to financial services and products for consumers, particularly the most vulnerable; however, new technology can also create new risks and unintended consequences that can harm financial stability, consumer protection, and market integrity. This primer is designed for financial supervisors at central banks, regulatory authorities, and government departments. It adds to existing literature by summarizing key aspects of popular consensus mechanisms at a high level, with a specific focus on how such mechanisms may impact the mandates of supervisors and policymakers when deployed in financial services markets. It could also help inform IMF staff on policy development and technical assistance related to crypto assets, stablecoins, and blockchains.

Subject: Blockchain and DLT, Economic sectors, Financial crises, Financial services, Technological innovation, Technology, Virtual currencies

Keywords: A. consensus mechanism, B. consensus mechanism, BigTech, Bitcoin, Bitcoin mining, Blockchain, Blockchain and DLT, Blockchain consensus mechanism, Central bank digital currencies, Crypto assets, Distributed ledger technology, Fintech, FINTECH note, Global, Proof-of-stake, Proof-of-work, Stablecoins, Technological innovation, Virtual currencies

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

FinTech Notes No 2022/003
Stock No:

FTNEA2022003
ISBN:

9781616358280
ISSN:

2664-5912

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