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

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.