ECB: We are not considering using blockchain in market infrastructure at this stage

Rage Comment : The development and application of new technologies always takes a long time, and the disruptive nature of blockchain makes financial institutions hesitate. Therefore, the European Central Bank representative also made it clear at the Sibos conference of SWIFT in Geneva, Switzerland that the technology will not be truly adopted at this stage or even for a long time, not to mention that there is still a lack of practical proof and standards in this field.

Translation: Annie_Xu

The development of applications based on distributed ledgers is already underway. But it will take a long time for banks to recognize the effectiveness of these applications and adopt them, at least in Europe. The European Central Bank (ECB) made this statement in Geneva, Switzerland.

On the 26th of this month, the annual financial services industry conference Sibos organized by SWIFT opened in Geneva, Switzerland. Yves Mersch, a representative of the ECB Executive Board, attended the meeting and expressed concerns about the hasty integration of blockchain into transactions and banking.

“At this stage the ecosystem is not in a position to consider the use of distributed ledger technology in market infrastructure.”

Mersch said that distributed ledger technology is still in its infancy and has not been tested in regulation, law, and operation. All financial and regulatory systems are built on the traditional economic system, and distributed ledger technology itself is highly disruptive, so it may give rise to conflicts between operations and regulation.

Yves Mersch

And there is no unified blockchain solution. Without random testing and standard setting of distributed ledger technology solutions by banks and markets, rash adoption will only fragment the market rather than unify it.

The lack of standardization is one thing, and the reliability of different blockchain and smart contract protocols is another problem. Ethereum was attacked by DOS (denial of service) twice within a few days, exposing the vulnerabilities of smart contracts and blockchain technology.

Ethereum is a pioneer in the development of blockchain protocols and has played an important role in promoting the application of blockchain technology in the field of Internet finance.

At this stage, developers of these blockchain protocols can already start building common blockchain standards and improving the security of the platforms; in the future they will be able to accelerate the adoption of digital currency technology.