The future of European financial market infrastructure: A business case for distributed ledger technology?

Author(s): 
Dirk Bullmann, Adviser to Director General, and Andrea Pinna, Market Infrastructure Expert, European Central Bank

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Abstract: Technological innovation in general, and distributed ledger technology (DLT) in particular, could become a game changer in the financial sector. Market infrastructures, which are the backbone of financial markets, need to adequately respond to technological advances and the resulting change in user needs and expectations. This paper discusses the potential impact of DLT on European financial markets and the potential scenarios of DLT adoption. Furthermore, it analyses the Eurosystem’s strategic considerations for the future of its market infrastructure and how change is embraced. Finally, it examines whether DLT could prove to be an integral part of the Eurosystem’s evolving market infrastructure and what other functions of the European Central Bank (ECB) could be affected by market actors adopting DLT.

 

Keywords: distributed ledger technology, blockchain, smart contacts, technological innovation, disruptive potential, European financial markets, market infrastructure, T2S

 

Dirk Bullmann coordinates FinTech work inside the European Central Bank (ECB) with a focus on market infrastructures.

 

Andrea Pinna is a market infrastructure expert in the Directorate General Market Infrastructure and Payments of the European Central Bank (ECB) where he specialises in the impact of innovation on collateral, payments and the post-trading of securities transactions.

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