carl - ludwig thiele : industry dialogue on " distributed ledger technology - potential benefits and risks " introductory statement by mr carl - ludwig thiele, member of the executive board of the deutsche bundesbank, at the g20 conference & quot ; digitising finance, financial inclusion and financial literacy & quot ;, wiesbaden, 26 january 2017. * * * mr von weizsacker, ladies and gentlemen whenever a technical topic attracts as much media attention as blockchain technology has, it must mean it ’ s something special, especially considering the topic itself is not an easy one. it ’ s safe to say that there is much anticipation surrounding distributed ledger technology – some feelings of hope, some of fear. and the influence this technology is likely to have extends far beyond the financial sector. the deutsche bundesbank operates large financial market infrastructures and also develops these further in line with technological advances. for this reason, we need to be aware of the potential benefits and risks of this technology early on. together with deutsche borse, we have developed a preliminary prototype for blockchain - based settlement. this prototype has the following capabilities : settling payments based on blockchain technology, transferring securities, processing basic delivery - versus - payment transactions, where securities purchases are settled and paid for simultaneously, and processing basic corporate actions, such as coupon payments on bonds and redemptions of maturing securities. the aim of the project is to learn, step by step : how blockchain technology works, how secure and reliable blockchain - based transactions are, which factors affect the costs of blockchain - based transactions, how efficient and effective blockchain - based processes are, and how existing processes may be improved using blockchain technology. one of the key points here is increasing process efficiency. by using a shared data pool across all entities concerned, it should be possible to standardise and simplify some of the overly complicated transaction monitoring processes we have today. in addition, a shared data pool in combination with a flexible access rights concept would, for example, also establish the conditions in which the relevant regulatory reporting and internal audit requirements could be met with reduced effort and designed more securely. we opted for a concept based on a hyperledger blockchain. the most important considerations for us when designing the hyperledger - based prototype were : 1 / 2 bis central bankers'speeches having a closed – or “ permissioned blockchain ” – network

in 2017 by establishing a link between our rtgs payment system mips and target2, which relies on the highly appreciated cooperation with bank of italy. and we do not stop here. our recent efforts have been focused on building a strategy for reducing the cash usage and thus, increasing the digitalization and cashless payments, which 2 / 3 bis central bankers'speeches is a joint project of the central bank, the ministry of finance and the banking community. during the following three days, the lecturers will address all the above relevant developments in the payment market. the conference agenda includes a variety of interesting topics, including the european payment landscape and legislation with a special focus on psd2, instant payments, t2 & t2s consolidation project, collateral management system, recent work of cpmi and latest trends in central bank oversight. this year ’ s agenda also covers themes related to cryptocurrencies, central bank digital currencies and distributed ledger technology and cyber resilience. the active participation of the conference is provided and encouraged through panel session on “ payments challenges in an integrating world ”, in which panelists from payment institutions and payment systems will be exchanging thoughts and ideas. last but not least is the expected interactive participation in the working groups scheduled for the last day of the event. i look forward to the discussions and wish all the delegates an enjoyable and rewarding conference, as inspiring as its location – the beautiful city of ohrid and the ohrid lake which i hope you will be able to enjoy too in the following conference days. thank you! 3 / 3 bis central bankers'speeches