ECB experiments with technology behind bitcoin – Mersch

FRANKFURT, April 25 The European Central Bank is
doing “experimental work” with the same ledger technology that
underpins virtual currency bitcoin but it needs further research
before considering adopting it, an ECB executive board member
said on Monday.

Yves Mersch said the ECB would look into whether distributed
ledger technology (DLT) — a shared database that can be used to
secure and validate any type of transaction — could be adopted
as the market infrastructure of the euro zone’s system of
central banks.

“From a central bank perspective, in the context of our
strategic reflections on the future of the Eurosystem’s market
infrastructures, we are certainly open to new technologies and,
like many market players, have launched some experimental work
with DLT,” Mersch said.

He added: “It is clear that we have a lot of more thinking
to do on DLT-related questions and their policy implications.”

The ‘blockchain’ technology was first used to support
virtual currency bitcoin but has since been tested or even
adopted by some brokers and banks for other purposes, such as
trading or sharing data.

Broker ICAP said earlier this year it had become the first
to distribute data on trades to customers using this technology
and 40 of the world’s biggest banks, including HSBC and Citi,
had also tested a system for trading fixed income based on it.

A report by the Bank for International Settlements published
late last year said this technology could reduce the need for
intermediaries such as banks and settlement houses and even pose
a “hypothetical challenge” to central banks.

To read Mersch’s speech, please click: here

(Reporting by Francesco Canepa; Editing by Ruth Pitchford)

mm – leading Bitcoin News source since 2012

Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. The information does not constitute investment advice or an offer to invest.