Stating that the Central Bank cannot be a good regulator for fintech regulation, the CEO of Nobitex said: Innovation is impossible without risk, therefore the regulatory structure of the central bank should be reviewed and a regulatory body should be formed in all fintech areas.
According to the Iran digital economy annotation, Amirhossein Rad, in his presentation on fintech regulation, at the January 9 event, pointing out that preventing monopolies, setting market rules, facilitating and protecting consumers are the inherent duties of the regulator, he said: the main goal of financial innovation (fintech) is easy access The society is for services and cost reduction, and the central bank, central insurance and the stock exchange organization are the regulators of this field, but instead of formulating standards, the regulator entered the executive level and tried to reduce the risk to zero.
Referring to the different areas of fintech, Rad added: No institution in Iran has access to control and monitoring tools as much as the central bank, and for this reason, this institution is in charge of regulating the fintech field, written and unwritten, but the structure of the central bank is not designed for regulation. And it does not recognize free markets at all.
Stating that with this situation, the central bank’s regulatory structure should be reviewed and a regulatory framework should be formed in all fintech areas, he said: We see the same conservatism at the macro level in sandboxes and other fintech sectors. The central bank has characteristics that hinder innovation.
First, it has no desire to change the playing field and disrupt the market order, secondly, its inherent duties are bigger and more serious, such as maintaining the value of the currency, controlling inflation, and supervising banks, thirdly, it does not receive a reward for development and innovation, the other issue is that the bank Central is the beneficiary and is the controller rather than the regulator and tends to reduce risk to zero.
The CEO of Nobitex emphasized: The goal of the central bank is not regulation, but control, but you cannot reduce the risk to zero. Innovation is impossible without risk.
Stating that due to structural issues in the current structure, the Central Bank is not a good regulator, Rad added: Either the structure of the Central Bank should be changed, it should be changed with the regulator. Another important point is that currently the central bank’s income is from transactions and does not benefit from regulation, that is, its income is not from businesses. If the interests of the central bank are tied to businesses, we can see the formation of new and innovative businesses.
He reminded: Financial markets are very interconnected and managing them requires expertise. We do not have any successful experience of free markets in Central Bank. Therefore, like many countries, we need a financial super-regulatory institution.
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