ECB and Bank of Japan launch joint research project on distributed ledgers

Rage Comment : The Bank of Japan is actively conducting blockchain financial research, but the European Central Bank has publicly stated that it will not apply blockchain to market infrastructure. Therefore, the direction of blockchain cooperation between the European Central Bank and the Bank of Japan is a major breakthrough in previous decisions; and the European Central Bank also emphasized the importance of blockchain technology. It fully affirmed the importance of this technology.

Translation: Annie_Xu

A senior European Central Bank official said the bank is jointly studying the application of distributed ledger technology with the Bank of Japan.

ECB Executive Board member Yves Mersch gave a detailed presentation on the work in this area at the Handelsblatt Annual Conference Banken-Technologie in Frankfurt, Germany.

Mersch said the two institutions plan to conduct a months-long technical study and may publish the results next year. The ECB has set up a task force on distributed ledgers to continue its previous research projects.

"We have decided with the Bank of Japan to jointly study the application of distributed ledger technology in market infrastructure, and we expect to publish the results next year. This will help us understand how this technology will change the global financial ecosystem and ensure that the central bank is adequately prepared."

Yves Mersch

However, Mersch said the technology is “not yet ready for widespread use” and that current ECB technical and security requirements would hinder integration. And any system developed independently or jointly by the ECB would need to undergo rigorous scrutiny.

"It is critical that market infrastructure based on any technology meets high security and efficiency requirements."

The statement is perhaps the most important speech by the ECB so far. Many central banks around the world have devoted a lot of time and resources to the technology, exploring its potential to replace existing infrastructure or issue digital currencies using the technology, especially the Bank of England.

Mersch said the ECB wants to be involved in global technological development.

"We understand that we are in the process of significantly changing the financial ecosystem and the ECB wants to be part of it."