(Bloomberg) -- Mark Carney is going crypto.

Confined by a self-imposed ban on talking about Brexit, the Bank of England governor will use his high-profile in his annual address to London’s financial community to talk about the technology behind crypto-currencies. Coming two weeks after Federal Reserve Chair Janet Yellen addressed the topic, his choice underscores how central bankers are embracing an innovation that could turn finance on its head.

Carney’s thoughts on digital currencies will be the BOE’s highest profile yet on the topic. He told lawmakers last month the speech will focus on what fintech developments mean for the structure of the financial system and what officials are “doing to enable that.”

The governor has previously shown a willingness to stray beyond the realm of regular central banking, and he’s now moving into an area that has ramifications for payments, cyber security and the reach of monetary policy.

“The central bank adoption of a crypto version of a fiat currency would be a game changer,” says Daniel Marovitz, the president of Earthport Plc, a London-based firm that’s building an alternative cross-border payments network for Bank of America Corp., the World Bank, and other global institutions. “The move would show the technology can work in the real world and not just the laboratory.”

Shared Platform

The topic will provide a welcome distraction for Carney, though the evening won’t be entirely Brexit free. Also speaking at the event at the Mansion House in the City of London will be Chancellor of the Exchequer George Osborne, who is still campaigning for Britain to remain in the European Union in the June 23 referendum.

As the BOE intensifies research into technology, its big thinker, Chief Economist Andy Haldane, has already said developments in digital currency raise questions around the very future of money. Still, Marovitz’s “game changer” may still be someway off. BOE Deputy Governor Ben Broadbent said in March that a lot more thinking needs to be done.

International central banks are already starting to shape the debate. The BOE has been studying whether blockchain, the decentralized accounting database that underpins bitcoin, could be used to make payments or issue sterling. The People’s Bank of China and the Dutch central bank are pursuing their own blockchain initiatives, and in February Barbados issued a “digital dollar” on the software.

Easy Money

Distributed ledger technology based on blockchain enables two parties to send assets to one another with the ease of sending an e-mail, and without third-party verification. This breakthrough has raised the possibility that intermediaries such as clearing firms may no longer be needed to settle and record securities transactions, a development that could dramatically reduce the costs and time needed to fulfill trades.

The software has also thwarted hackers because it’s not centralized. With no hub to take down, the bitcoin blockchain hasn’t been successfully attacked in the seven years of its existence. Yellen spoke this month about the software’s potential to strengthen cybersecurity. And it’s that capability that has drawn more attention from authorities and investors after cyberthieves manipulated interbank messaging system Swift to steal $81 million from Bangladesh’s central bank this year.

Cash Free?

The potential benefits for central banks don’t stop there. Officials including BOE’s Haldane have indicated that sub-zero interest rates -- already used by the Bank of Japan and the European Central Bank -- could work better in a cash-free society.

“What the bank seems to be interested in, at least at the theoretical level, is to figure out whether it’s possible to have a central bank-controlled digital currency,” said Peter Dixon, an economist at Commerzbank AG in London. “What central banks are a bit concerned about is that technically or theoretically at least, it’s possible that they could lose some control over the monetary creation process.”

The most valuable feature for central banks may be how smoothly blockchain-based technology could pump cash directly into the economy at a time when near-zero interest rates have removed one of their key policy tools. In a February speech, Broadbent theorized that households might be able to hold their current accounts directly in the central bank via the software.

Such a development would pose major questions for commercial banks and their role as intermediaries channeling savings into investment. But the convergence of smartphones, cloud computing, and crypto-currencies is prompting Carney and his deputies to confront big shifts in the way money is managed.

“We’ve had a digital revolution, which is changing the way in which financial services are being sold and transactions processed,” Commerzbank’s Dixon said. “That’s going to have implications for the way the Bank of England operates.”

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