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Interoperability crucial for DLT in post-trade processes - ECB

Interoperability crucial for DLT in post-trade processes - ECB

Market participants working on the use of DLT in post-trade processes need to ensure interoperability if the technology is to succeed, according to a European Central Bank report.

While there is no shortage of DLT prototypes and real-world experiments in the post-trade space, a "clear business case" has yet to emerge for the technology, says the ECB.

However, this could change rapidly as the regulatory and technological environment evolves. If it does, it is essential that different types of architecture and networks can safely and efficiently coexist to maintain an integrated market for post-trade services and infrastructures, says the ECB.

Most current initiatives, the central bank warns, focus on proprietary business rules and technical standards, which could cause interoperability problems.

The industry should work towards common protocols and standards to avoid isolated ecosystems as well as an uneven playing field.

In parallel, the ECB says clear and sound governance of service and functions should be ensured in a DLT environment, with a consolidated approach based on regulatory licences and conduct of business rules.

Read the report:

Download the document now 326.5 kb (PDF File)

Comments: (1)

A Finextra member
A Finextra member 13 April, 2021, 12:59Be the first to give this comment the thumbs up 0 likes

 Establishing best practices and establishing workflow processes for payment transactions with an industry wide focus will help reduce risk for payment transactions and implementation and on going support cost. Eliminating passwords in bank operations need to be top priority for increased security for DLT applications. The password is the weak link.