The European Union’s central bank today once again shot down the idea that it might use distributed ledger tech as part of its market infrastructure in the near future.
Published alongside the latest annual report from the European Central Bank, released today, was a feature on the tech. While largely written in broad strokes, the paper reiterates a position expressed in the past by ECB officials – namely, that the central bank isn’t likely to tap distributed ledgers in the near 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 closely mirrors statements from ECB executive 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 similar concerns focused on cybersecurity and operational efficiency.
Still, the ECB is pursuing a research effort alongside the Bank of Japan, which sees the two institutions weighing potential applications. And, in its feature, the ECB kept the door open to possible use in the future, though it offered nothing in the way of a possible timeline or indications as to what would drive it to utilize 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 bank said.
The ECB has been actively testing the tech since early last year.