A recently published paper explores the suitability of ‘public crypto networks’ for financial market infrastructures. It was co-authored by Ulrich Bindseil, the European Central Bank’s (ECB’s) Director General for Market Infrastructure and Payments, alongside Columbia University’s Omid Malekan. Overall it’s very positive about the potential for financial innovation on crypto networks.
The authors conclude that many of the benefits of public blockchains “could allow crypto networks to provide financial market infrastructure with unprecedented efficiency.” That includes their support of decentralized finance (DeFI), their ability to eliminate intermediaries and enable automation.
Assuming the digital euro gets a green light from regulators, Europe could have a central bank digital currency (CBDC) in three or four years. The paper states, “there is no technical reason why a CBDC can’t be issued on a public crypto network. A central bank – if comfortable with the risks …- could also issue a cash-like claim against its balance sheet on Ethereum as it could on a permissioned “unified” ledger managed by the BIS.”
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
