Cipollone (ECB): 'Blockchain does not jeopardise stability'

Blockchain technology is still at an exploratory stage in the financial sector in Europe, but it is expected to become widely used in wholesale payments in the coming years and therefore 'central banks cannot stand idly by'.

This was stated by ECB member Piero Cipollone as he opened the proceedings of the 30th Assiom Forex congress in Genoa. According to him, "any large-scale adoption of such innovations could jeopardise the system's anchor role in ensuring the efficiency and stability of our payments system".

"Currently," he notes, "only about 22% of European banks use it and another 22% are testing or experimenting with it. However, most of the players involved in the Eurosystem survey expect significant use of DLT for wholesale payments and securities settlement in the next five to ten years".

'The rapid growth of digital technologies has attracted wide market interest and stimulated experimentation,' says Cipollone. 'DLT-based technology (digital representation of financial or real assets on distributed ledger platforms) is promising as it could increase the efficiency of operations for some traditional uses and enable new use cases.

In his speech, Cipollone emphasised that caution is needed 'so that such innovations do not compromise the stabilising role of central bank money in the settlement of transactions between financial institutions. Therefore, central banks must be ready for the possible wide adoption of new technologies and keep pace with their evolution, as they have done in the past'.