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The European Central Bank is weighing whether blockchain can help it control the financial system if lenders move to distributed ledgers, Reuters reports, citing ECB board member Fabio Panetta.
The ECB wants to find out how it could allow financial institutions to settle wholesale transactions between them on a blockchain. Panetta said:
"Despite the uncertainties surrounding DLT's potential, we want to be prepared for a scenario where market players adopt DLT for wholesale payments and securities settlement."
The European watchdog is also eyeing to build a cross-chain bridge between blockchains, however, no details were revealed. In May, Panetta said that the ECB might roll out its own version of digital currency (digital euro) by 2026.
During a speech at the National College of Ireland, ECB's executive board member Fabio Panetta said that the regulator could at the end of 2023 decide to start a "realization phase" to develop and test the appropriate technical solutions and business arrangements for a digital euro. According to Panetta's estimates, this phase "could take three years."
