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Central bank money and blockchain: A payments perspective
Journal of Payments Strategy & Systems,
11
(2),
145-157
(2017)
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.
Keywords: distributed ledger technology; blockchain; payment systems; central bank money; interoperability
The full article is available to subscribers to the journal.
Author's Biography
Jürgen Bott is a professor of finance management at the University of Applied Sciences in Kaiserslautern. As visiting professor and guest lecturer, he has associations with several other universities and business schools, such as IESE in Barcelona. He studied business administration at the Julius Echter University of Würzburg, and statistics and operations research at Cornell University (New York). He received his doctorate degree from Goethe University, Frankfurt. Before he started his academic career, he worked with JP Morgan, Deutsche Bundesbank, and McKinsey & Company. He was involved in projects with the International Monetary Fund and the European Commission (EC) and is an academic adviser to the EC, helping to prepare legislative acts or policy initiatives on banking issues.
