Central bank money and blockchain: A payments perspective

Abstract

Although distributed ledger technology (DLT, aka ‘blockchain’) is associated with high production costs and low capacity, it represents a practical solution for ‘electronic cash’ and a starting point for the innovation of new kinds of transactions in digitised economies. Among other institutions, the European Central Bank is committed to exploring the potential of such new technologies. This paper provides a first reflection of central bank money on blockchain, and evaluates the possible scenarios. It argues that the digitisation of central bank money (backed by trust) via DLT can open new perspectives on a digital economy with efficient and secure market infrastructures, linking new technological concepts with existing benefits.