IDEAS home Printed from https://ideas.repec.org/a/bfr/fisrev/20162015.html
   My bibliography  Save this article

Implementation of real-time settlement for banks using decentralised ledger technology: policy and legal implications

Author

Listed:
  • Gifford, K.
  • Cheng, J.

Abstract

A wave of innovation is occurring in financial technology, affecting products and services offered to consumers and businesses as well as financial market infrastructures such as payment and settlement systems. These innovations taken together have the potential to vastly lower the cost of financial transactions, resulting in a qualitative shift analogous to the advent of the internet in the 1990s, supporting international financial inclusion and enhancing global systemic stability. We refer to both the current set of innovations bringing about the shift we describe, as well as future innovations built on these new technologies, as the Internet of Value (IoV). Just as the internet ushered in an era of rapid innovation, economic growth and productivity gains, the potential promise of the IoV includes greater prosperity, financial access, stability and further innovation; however, appropriate industry, regulatory and policy support will be needed in order to achieve this promise. This paper examines one recent financial innovation, decentralised ledger or blockchain technology, and considers the legal and policy ramifications of one of its most widely-discussed use-cases: real-time settlement in bank-to-bank payments. Our analysis focuses on two elements, trust and coordination, both of which are fundamental to current payments laws and rules. Decentralised ledger technology replaces certain operational and even legal elements of the current payment system; yet trust and coordination continue to be relevant considerations. Creation and adoption of appropriate policy and legal frameworks are key to optimising the potential benefits of this technology.

Suggested Citation

  • Gifford, K. & Cheng, J., 2016. "Implementation of real-time settlement for banks using decentralised ledger technology: policy and legal implications," Financial Stability Review, Banque de France, issue 20, pages 143-151, April.
  • Handle: RePEc:bfr:fisrev:2016:20:15
    as

    Download full text from publisher

    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/financial-stability-review-20_2016-04.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Don Gunasekera & Ernesto Valenzuela, 2020. "Adoption of Blockchain Technology in the Australian Grains Trade: An Assessment of Potential Economic Effects," Economic Papers, The Economic Society of Australia, vol. 39(2), pages 152-161, June.
    2. C. Pfister, 2017. "Monetary Policy and Digital Currencies: Much Ado about Nothing?," Working papers 642, Banque de France.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bfr:fisrev:2016:20:15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael brassart (email available below). General contact details of provider: https://edirc.repec.org/data/bdfgvfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.