The European Central Bank is weighing the use of distributed ledger tech in partnership with Japan’s central bank, one of its senior officials said today.
Speaking today at the Handelsblatt Annual Conference Banken-Technologie in Frankfut, ECB executive board member Yves Mersch offered new details on its work in the area.
Mersch said that the the two institutions plan to explore the tech over the next months, with an eye to publish the results of its research sometime next year. The ECB has also formed an internal task force focused on distributed ledgers, building on past research efforts.
He told attendees:
“Together with the Bank of Japan, we agreed to launch a joint research project which studies the possible use of [distributed ledger technology] for market infrastructure. The project is expected to release its main findings next year. This work can help define how new technologies can change the global financial ecosystem of today and ensure that central banks are adequately prepared.”
However, Mersch remarked that the tech “is not ready for mass adoption”, adding that at present that the ECB’s technical and security requirements would prohibit integration today. Further, any system that might be developed either solely by the ECB or in partnership with other central banks would be subject to intense scrutiny prior to launch, Mersch said.
“It cannot be stressed enough that any technology-based market infrastructure service needs to be mature enough to meet high requirements in terms of safety and efficiency,” he noted.
The statements perhaps represent the ECB’s most forceful on the subject to date. A number of central banks worldwide, most notably the Bank of England, have invested time and resources in investigating the potential to replace some of its infrastructure with the tech, or utilize it to issue central bank-tied digital currencies.
According to Mersch, the ECB wants to be a stakeholder in that global effort.
“We are on a journey which could radically alter the financial ecosystem as we know it. The ECB is committed to be part of this journey,” he concluded.