An official from the European Central Bank (ECB) has proposed the concept of a ‘European ledger’ – a unified ledger for the continent. This blockchain could consolidate European digital assets and money in one place, leading to increased efficiency and synergy.
Piero Cipollone, a member of the ECB Governing Council, highlighted the fragmented nature of traditional European capital markets due to non-harmonized legislation. He sees an opportunity to create a unified platform for digital assets, referring to it as a digital capital markets union.
Investors and central banks stand to benefit from this initiative. Cipollone noted that a significant percentage of banks in the European Union are exploring or utilizing distributed ledger technology (DLT). While DLT offers financial inclusion opportunities, it does not guarantee it due to isolated pools of asset liquidity created by non-interoperable technology ecosystems.
A unified ledger combines cash and assets on a single platform, a concept favored by the Bank for International Settlements and central banks. While it offers benefits such as financial stability and integration, it may also pose challenges like stifling innovation in specific applications.
The ECB continues to explore ways to settle DLT transactions with central bank money, despite potential inefficiencies in the long term. Cipollone emphasized the importance of flexibility in traditional finance, suggesting that competing DLT platforms could offer valuable options while potential issues are being addressed.
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