European Central Bank: Still Too Early for DLT in Eurozone

The European Union’s central financial institution right now as soon as once more shot down the concept that it would use distributed ledger tech as a part of its market infrastructure in the close to future.

Published alongside the latest annual report from the European Central Bank, launched right now, was a feature on the tech. While largely written in broad strokes, the paper reiterates a place expressed in the previous by ECB officers – particularly, that the central financial institution is not prone to faucet distributed ledgers in the close to future.

The ECB wrote:

“The ECB is open to considering new ways to enhance its market infrastructure. However, any technology-based innovation would have to meet high requirements in terms of safety and efficiency … At this stage of its development, [distributed ledger technology (DLT)] is not mature enough and therefore cannot be used in the Eurosystem’s market infrastructure. As DLT-based solutions are constantly evolving, the ECB will continue to monitor developments in this field and explore practical uses for DLT.”

The language intently mirrors statements from ECB government board member Yves Mersch, who in December remarked that “the ECB cannot, at this stage, consider basing our market infrastructure on a DLT solution”, highlighting comparable considerations targeted on cybersecurity and operational effectivity.

Still, the ECB is pursuing a analysis effort alongside the Bank of Japan, which sees the 2 establishments weighing potential functions. And, in its characteristic, the ECB stored the door open to attainable use in the longer term, although it provided nothing in the best way of a attainable timeline or indications as to what would drive it to make the most of the tech.

“As DLT-based solutions are constantly evolving, the ECB will continue to monitor developments in this field and explore practical uses for DLT,” the central financial institution stated.

The ECB has been actively testing the tech since early last year.

ECB flag image by way of Shutterstock