The European Central Bank wants centralized financial payment systems to interact better with distributed ledger technology (DLT) to keep pace with technological developments in financial markets.
While the ECB is currently considering whether to issue a retail central bank digital currency (CBDC) for use by general traders and citizens, wholesale financial markets, including those that use the technology behind cryptocurrencies, will not. We want to be able to interact with our innovations.
Central banks using the euro currency, collectively known as the Eurosystem, will “explore ways to settle wholesale financial transactions recorded on DLT platforms in central bank money.” Statement issued by the ECB on FridayThe ECB is reportedly convening industry groups to help.
The announcement reflects growing interest in technology from traditional financial markets, including the post-trade infrastructure that finalizes trades made on exchanges. Euroclear, a Brussels-based company that specializes in clearing and settlement, will soon release a new platform for DLT-based bond trading, while Forge, the crypto arm of French bank Societe Generale, will launch CoinVertible. Introduced a stablecoin (EURCV). pegged to the euro to settle digital assets.
In a statement to the European Parliament’s Committee on Economic and Monetary Affairs on Monday, ECB board member Fabio Panetta said: “Working to make Europe’s payments and financial system more competitive will require We need to work on several fronts, not just the euro.”
Citing the ECB’s system known as TARGET2, Panetta said, “We already have a wholesale CBDC, a digital infrastructure that allows banks to make interbank payments.” Assess whether the technology in use – the centralized technology operated by the Eurosystem – needs to be updated to more easily interoperate with intermediaries that may employ distributed ledger technology. doing.”
