Minister of Economy and Finance Ehsan Khandouzi announced at the Islamic Banking Conference that the Blockchain, smart contracts and digital currencies provide institutions with an unparalleled opportunity for transparency, anti-money laundering and tax evasion.
According to digital currency and to Quoted On the first day of the 31st Islamic Banking Conference entitled “Islamic Banking with a Look at the Statement of the Second Step of the Revolution”, Seyed Ehsan Khandouzi, Minister of Economy and Finance, announced new technologies such as blockchain, smart contracts and digital money of the Central Bank. Today, it enables both bank executives to instantly see how their balance sheets are changing across the country, and increases central bank control over the flow of funds, making it a unique opportunity for transparency, anti-money laundering, and It creates tax evasion and the like.
If we consider the bank as a mere intermediary of funds, the bank usually has a very limited and passive role in supporting production, but if we consider the bank as an institution that publishes 97% of the country’s money and liquidity and allocates it to its consumption, then the picture Changes. We can then ask which assets the bank that created the money by borrowing in return acquired and how it changed the composition of its balance sheet.
In his speech, the Minister of Economy and Finance referred to the issue of “corporate governance in banks and the issue of supervision” and stated:
In this regard, two questions can be asked, one is that if the interests of banks do not require them to finance production, what is their responsibility? And second, when does the regulator become aware of banks’ decisions about how to allocate credit?
He asked questions to explain this. Khandouzi stated that the first question takes me to the second axis of my talk about bank governance, which is the other axis of today’s conference:
It is quite possible for a bank to spend its resources on building large-scale department store complexes and spending thousands of billions of tomans of new liquidity on it. A bank may spend its resources creating a bubble in the secondary market, a bank may use new money to pay interest on deposits for which there is no asset on the right side of the banks’ balance sheet.
He stressed that all these measures increase destructive and self-generating liquidity in the country, and the question is what is the responsibility of banks for the adverse effects of such allocations? What is the difference between managers who have played an effective role in financing productive activities and managers who waste such vital resources of the country and make speculation to the detriment of profitable production and entrepreneurship? Does the system of governance and management differentiate between these types of banks or does it reward the profitability of business activities as much as the profitability of production support?
The regulation and implementation of corporate governance rules is one of our central programs in the Ministry of Economic Affairs and Finance, and fortunately, a bill has been prepared for this purpose in the Ministry, which will be pursued more vigorously.
The Minister of Economic Affairs and Finance said:
The second question brings me to the issue of monitoring, monitoring has many dimensions that I do not have time to address here, and I just want to point out two main points. One is that the supervisor and the policymaker should not be one, otherwise effective oversight will not be possible.
In this situation, we must move towards the policy-maker to pursue policies to pursue his goals and the supervisor to ensure their proper implementation, we must pursue this issue in the form of the Central Bank Bill.
Khandouzi stated that during the presence of the Central Bank bill in the Islamic Consultative Assembly, an effective call was sent for the positive proposals of the Central Bank plan and now, from the position of the Ministry of Economic Affairs and Finance, I continue to lend a helping hand to Islamic banking and monetary policy experts.
The Minister of Economic Affairs and Finance added:
Second, new technologies such as blockchain, smart contracts, and central bank digital money make it possible for bank executives to see instantly how their balance sheets are changing across the country, as well as the central bank’s control over cash flow. And this creates a unique opportunity for transparency, anti-money laundering, tax evasion and the like.
It is worth mentioning that the 31st Islamic Banking Conference entitled “Islamic Banking with a Look at the Statement of the Second Step of the Revolution” on 9 and 10 September due to the spread of the Corona virus and compliance with health protocols, only with speakers, panelists and presenters at the Central Bank It is held and broadcast online in order to benefit other experts and the general public through the link http://conf31.ibi.ac.ir/.
The main topics of the conference based on the approvals of the Strategic Council and the Scientific Committee include “Banking Law Reform: Background and Needs”, “Banking Governance: Criticism and Evaluation”, “Banking Business Model: Evaluation and Pathology” and “Obstruction and Support From production: “The role and responsibility of the banking system” which is discussed in the form of specialized roundtables with the presence of experts, pundits and previous heads of the Central Bank.