According to Fabio Panetta, a member of the ECB executive board, the European Central Bank (ECB) is considering the potential capability of distributed ledger technology (DLT) to boost the effectiveness of interbank settlements. After detailing the numerous advantages of DLT, Panetta also emphasized several disadvantages and argued against developing a new wholesale settlement system based on DLT. Alternatively, he suggested expanding on the ECB’s current infrastructure. Wholesale CBDC – New DLT-Based Digital Currency According to Panetta, wholesale central bank digital currencies (CBDCs), which are often presented as a new type of DLT-based central bank digital currency that can only be used to settle interbank transactions, have been around for decades. On Monday, Panetta remarked that banks in the European Union (EU) could already settle large-scale digital payments using the ECB’s TARGET Services on a centralized ledger. 100 Nations to Investigate Wholesale CBDC In 2021, the market value of cryptocurrencies hit around $3 trillion, which pushed central banks across the globe to consider how to stay awake with the crypto industry and the DLT technology that supports it. Wholesale CBDCs are consumer and payments-focused digital currencies, and around 100 nations are investigating them. Additionally, a two-year examination of a retail CBDC is now proceeding at the ECB. According to Panetta, DLT can allow for the immediate sett...
