Barnabás Virág
Deputy Governor (Monetary Policy and Financial Stability), Magyar Nemzeti Bank
Faster, safer, sleeker: A giant leap in the age of the digitalisation of money It is no coincidence that the above title mirrors the motto of the modern Olympic movement attributed to Pierre de Coubertin: ‘faster, higher, stronger’. Taking and maintaining the lead can only be achieved through continuously improving performance. A ten-year-old world record may not even qualify one for the finals. We can only stay in the game if we are able to surpass ourselves and all of our earlier attainments. The instant payment system was introduced in precisely this spirit. It has merely been a few years since intraday credit transfers were laid at the proposal of the Magyar Nemzeti Bank. This was a huge breakthrough back then, and it seemed to be enough for the years to come. However, competition did not stop, expectations increased and technology developed. Hungary needed an even bigger innovation to get to the top once again. This is what sparked the ambitious idea of instant payments, which went live in the spring of 2020, at the best possible time in some respects, thanks to the exemplary cooperation between state actors and market participants. The introduction of the system of instant credit transfers reflects the change in how the MNB sees its own role. Prior to the financial crisis, the widespread view had been that central banks should interpret their mandate fairly narrowly and remain more or less passive observers of economic developments. The term coined for such narrowing of state engagement was ‘night-watchman state’, and with regard to central banks the most frequently used expression was ‘ivory tower’. However, the financial crisis showed how flawed this notion was, how dangerous it was to leave the economy to its own devices,
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