The European Union’s central bank recently commented on how the economic bloc could move to encourage the spread of new technologies like blockchain.
The commentary was featured in a recent statement from the European Central Bank (ECB) as part of a comprehensive review of the region’s capital markets, a process spearheaded by the European Commission (the EU’s executive branch).
Before wider adoption within EU’s capital markets infrastructure takes hold, however, the ECB said that a number of conditions would need to be right. Namely: establishing the legal nature of digital currencies and the information stored on distributed ledgers, developing standards for interoperability, and creating a cohesive regulatory position across the bloc.
That said, the ECB advocated for an approach that doesn’t limit innovation – something it indicated should be applied to technologies beyond blockchain.
The bank noted:
“The ECB suggests that the current efforts towards the development of harmonised and principle-based regulation and legislation across Member States be reinforced. This would ensure that market participants developing new services and technologies are not limited by different national legislations and by the risk of unexpected regulatory changes.”
The statements come weeks after the ECB reiterated that it believes the DLT market is too nascent for any kind of new regulatory approach. At the same time, it noted that the tech “is not mature enough and therefore cannot be used in the Eurosystem’s market infrastructure” – or, to put it more simply, the ECB isn’t quite ready to use blockchain.
ECB image via Shutterstock