German Central Bank Says Blockchain Unlikely To Transform Retail, P2P Payments
Deutsche Bundesbank, Germany’s central bank, has predicted that blockchain technology is unlikely to gain “widespread use in the field of individual and retail payments” in a monthly report, the most recent issue of which focuses on what blockchain technology “might mean for payments and securities settlement.” The report explains that because the systems currently in place to process such payments are sufficiently fast and equipped to handle high-transaction volumes, especially in the eurozone, consumers will lack the incentive to switch over to a blockchain-based payment system.
Nonetheless, its authors believe that this technology could potentially simplify and expedite the delivery of at least some international payments.
The report, which details findings from research conducted by the bank in partial cooperation with equities networking firm Deutsche Börse, is only available in German, but the English-language synopsis that accompanies it suggests that blockchain holds promise in addressing other issues. These include transparency, cybersecurity, trade finance, and the presently labyrinthine set of processes involved in securities settlement.
Ultimately, though, the report’s authors believe that the technology “requires extensive modification if it is to be adapted to suit the needs of the financial sector.”
On the other hand, organizations and individual pundits, most recently JP Morgan Chase CEO Jamie Dimon, have faced scorn and ridicule from the online blockchain commentariat over remarks that downplay the technology’s anticipated impact on the world at large.