TECHNOLOGY banks worldwide from exploring DLT-based digital currencies .
The Bank of England suggests potential savings through reduced real interest rates and lower transaction costs , while China ’ s central bank has tested a blockchain-based digital currency .
The World Bank Group notes that “ any central bank-issued digital currency would likely look substantially different from Bitcoin ’ s open , decentralised , peerto-peer model ”.
Looking ahead , ESMA anticipates that “ the early applications of DLT focus on optimising processes under the current market structure ”, with adoption targeting less automated processes in low-volume market segments .
The World Bank Group emphasises that success requires not just technological development but also “ financial literacy and capability , a sound financial consumer protection framework , interoperability with traditional payment and financial services and infrastructure , and effective oversight ”.
As the technology matures , its impact is likely to be evolutionary rather than revolutionary . The key to successful implementation will lie in addressing technical challenges while ensuring regulatory compliance and maintaining market stability .
The World Bank Group concludes that while waiting for perfect DLT solutions is not ideal , “ understanding the true potential of DLT for development objectives requires not just research but also real-life applications and trials ”.
DLT : A SUMMARY
Ethereum lost US $ 50m due to smart contract code vulnerability .
Bitcoin proof-of-work consumes electricity equivalent to Ireland ’ s entire consumption .
Smart contracts automatically execute predefined agreements on distributed ledgers .
DLT could save the financial industry US $ 15-20bn annually in costs .
Estonia uses DLT to verify government records and digital identities .
Bitcoin processes only 4-7 transactions per second compared to Visa ’ s capacity of thousands per second .
Central banks worldwide exploring blockchain-based digital currency implementations globally .
Over 170 organisations support Hyperledger Project ’ s distributed ledger initiatives . fintechmagazine . com 115