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

##ystem, as potential issuers, enjoy a high level of confidence among enterprises and the public. this is a foundation that can be built on. a digital euro would safeguard the “ anchor function ” of government money in our two - tier monetary system in the digital age as well. this way, the ecb ( european central bank ) and the national central banks in the eurosystem would be able to carry on ensuring that payments are safe and efficient. last but not least, a digital euro also fits in well with other digitalisation efforts by european legislators. the digital identity wallet planned as part of the revised eidas regulation could be given an additional boost if a digital euro could also be held in such a “ government ” wallet. this brings us to the question of “ what ” a digital euro could deliver. 2 what could a digital euro deliver? in principle, a digital euro could combine efficient and secure payments with a pan - european reach. the following advantages are conceivable : • it would be a useful complement to cash, as people would also have access to central bank money in the digital sphere that would be secure, cost - effective and stable in value. • the digital euro could offer all groups in society quick and convenient access to a digital means of payment. this is where private payment service providers, with their customer expertise and experience, come in to design suitable solutions. less digitally savvy people could potentially pay with a digital euro on a payment card even without an internet connection, i. e. ( that is ) “ offline ”. • at the same time, the issuance of a digital euro would not be driven by business interests. the data generated by payments would not be used commercially by central banks. more than 340 million people would be able to use cbdc ( central bank digital currency ) to pay anywhere in the single euro payments area ( sepa ( single euro payments area ) ), across borders and independently of international providers. in order for the digital euro to be a success, it must serve the needs of users. to learn more about these, the eurosystem asked various groups in society and smaller merchants what they would expect from such a means of payment. payers said they want a solution that can be counted on to work in as many situations as possible and is accepted across all the sepa ( single euro payments area ) countries – and beyond, if possible. it should be technically simple, free of charge and secure.