Denis Beau, the First Deputy Governor of Banque de France has recommended using distributed ledger technology (DLT) for settlements within the Eurozone.
The European Central Bank (ECB) “should be open to experimenting” with blockchain and distributed ledger technology (DLT), as a way of settling euro-denominated transactions, said Beau during a speech last Thursday (November 21) in Paris at the second annual Capital Markets Technology and Innovation Conference.
He cited the growing demand for faster transactions, both within and without the EU’s Eurosystem – the network of ECB and national European central banks using the euro currency – as cause for experimenting with blockchain/DLT, saying that existing solutions are “costly for end users [and] slow and unsafe across the world, in particular in emerging countries.”
The French central bank has in fact already been building a pilot blockchain system, as the Deputy Governor pointed out. This is the so-called “MADRE” payments register, an experimental system that aims to store all Credit Identifiers of the SEPA system (Single European Payments Area) on a blockchain. While technically operational, MADRE does not seem to be used yet for any actual money transfers, and it is still only a prototype.
The broader theme of Beau’s talk was that of a self-aware style of innovation, which is cognizant of the potentially negative consequences of innovation – innovation that creates “imbalances” and has “uncertain” long-term benefits to society. Encapsulating these notions, Beau said that economic growth should be “sustainable” and “inclusive.”
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