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European Central Bank opens up to blockchain

By Sharon Rowe
In Bitcoin
Feb 21st, 2016
0 Comments
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The European Central Bank has put out a statement that the central bank is now taking a closer look at the blockchain and its advantages. In a report that the European Central Bank released it says that the bank is looking forward to new innovations similar to the blockchain and distributed ledger technology to improve banking and settlement systems in general.

The central bank revealed its report this week, a report that is completely focused on the future of Europe’s financial market and its infrastructure. The Europe’s financial market is comprised of euro-systems and is a collective of the ECB and other central banks of all European Union’s member states.

A short piece from the report:
A number of actors within the financial industry are already evaluating the impact that the blockchain could have on financial services.

The report also states that the bank is increasingly involved in more talks, studies and publications revolving around the distributed ledger technology and its impact on the industry as a whole.

Blockchain could revolutionize today’s banking

A part of the bank’s vision is to assess the relevance of the impacts on the industry and how it can change or better the infrastructure. In particular how distributed ledger technology could affect banking communities – payments, settlements and collateral. The investigation of the central bank will identify opportunities that the new technologies like the blockchain may offer, but also keeps an eye on the challenges that come with them.

The European Central Bank’s interest in blockchain or as they call it, distributed ledger technology, is quite interesting and peculiar as they are so hard against cryptocurrencies. But there is a reason for the open approach to blockchain.

Target2-Securities project is failing

One of their flagship projects called Target2-Securities (a single settlement platform) that was implemented in June 2015 has been having issues. The settlement platform is having a lot of technical concerns which causes the system to fail horribly. Blockchain technology could be the answer.

Blockchain will offer a very revolutionizing cure to problems that the banks have within the settlement and post-trade industries. When the technology has been fully rolled out and developed, the general consensus amongst experts and enthusiasts is that blockchain would be a perfect solution for instant settlement of trades in a very efficient and equally cheaper way. And if there is one thing that bankers love, is low cost high reward.

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