the selling price in cash on the other hand. settlement in seconds, without the risk of the other party not delivering in time, could be a promising future. an often mentioned downside of using dlt in this context is settlement finality, which depending on how the blockchain is configured, cannot always be fully guaranteed. a third potential benefit is that blockchains can be designed so that the central bank or supervisor can see details of all transactions. this allows for regulatory supervision and oversight, which is needed for maintaining the high standards of integrity in the financial system. finally, one of the greatest obstacles to using blockchain in the financial system is its efficiency. banks and other firms process millions of transactions daily. but this is a major challenge for decentralized systems like dlt. energy efficiency is still a problem too : there are estimates that the bitcoin mining network uses a a similar amount of energy as the whole of ireland. public blockchains that make use of other consensus models could more efficient. also, a privately permissioned system, would greatly diminish energy consumption. but it seems very unlikely that blockchain will be able to process as many transactions as current systems do, at least not any time soon. undoubtedly, some of the benefits of blockchain will only materialize when the technology has been developed further. when the system as a whole is more mature. there should be more real - life examples to test the resilience of blockchain applications. certain financial firms have already taken the first steps. central banks are experimenting with blockchain and are open to further advancements, while keeping a close eye on the possible risks. for the moment however, we can only conclude that blockchain hasn ’ t led to any groundbreaking changes in the payments ecosystem. from a financial system perspective, the ‘ evolution of power ’ has not yet occurred. on cryptos and their risks blockchain ’ s most visible impact on the financial landscape has been the rapid rise of cryptos. this is a topic that deserves more attention. let me first clarify that we, as the central banking community, tend not to use the term ‘ cryptocurrencies ’. the word ‘ currency ’ implies money. our understanding of money is something completely different. it is based on the three functions of money – as a means of payment, store of value, and unit of account. even bitcoin, the most widely - recognised crypto,

doesn ’ t fulfill these functions. it ’ s difficult to pay with it in a store, its value is undermined by its volatility, and it has no use as a unit of account. as it doesn ’ t meet these three criteria, we prefer to use the term crypto - asset or simply, crypto. cryptos could represent opportunities as well. for instance in the financing of small and mediumsized companies. a lot of people invest in cryptos, and they have been designed to improve crossborder payments. you ’ ll notice that now i ’ m talking about cryptos, i will shift the focus from the opportunities, to the risks. cryptos are a development that demands the vigilance of regulators and supervisors. so far, they have not developed into the deeply rooted and widespread payment systems some might have hoped for. to date, cryptos have a modest financial footprint compared to the rest of the financial system. the lack of widespread use is partly caused by an issue that keeps haunting cryptos. some consider this issue to be inherent to their design. and that is their potential use for money laundering and other illicit activities. a system built around circumventing central oversight is bound to attract certain types of people. the anonymity that cryptos guarantee is both a help and a hindrance to their development. another reason why current cryptos are generally an unsuitable replacement for our trusted currency and payment systems, is their volatility. it makes them unattractive as a unit of account or store of value. as there is no supervisor, you hold cryptos at your own risk, and your investment is not guaranteed like it is at a bank. failures or hacks of crypto wallets have already led to significant losses for consumers. also, many initial coin offerings fail as they cannot generate an asset that keeps its value, even for a couple of days, leaving investors behind with a useless and worthless token. last but certainly not least, cryptos and the underlying technology are still far less efficient than our current payment systems, as i explained earlier. so the use of cryptos is still limited. but if impediments can be overcome, we might see their more widespread use. let ’ s look at this scenario from a central banking perspective, as we at the dutch central bank are ultimately responsible for the good functioning of the financial system. such a development could have implications for financial stability. the financial stability board will soon publish