role of the sdr may require, at some point, revising the composition of the sdr basket in order to make it more representative of the world ’ s main economic regions. two elements should, however, be kept in mind : first, for operational reasons, it would be preferable to continue to restrict the basket to a limited number of major currencies ; second, all the component currencies should be fully convertible and have well developed financial markets with full capital mobility, since by allowing arbitrage to keep the valuation of sdrbased instruments in line with that of instruments in the component currencies, this would facilitate both their development and their acceptance. this implies that the inclusion of the chinese renminbi in the sdr basket, highly desirable on economic grounds, may nonetheless need to be postponed until sufficiently developed and open renminbi financial markets exist. it is important now to ask in which ways an enhanced role of the sdr could contribute to address the fundamental flaws of the existing international monetary system. this is a complex question and i have only some tentative answers. first, once the sdr becomes a true reserve asset, there would be an incentive for countries with a broadly diversified set of trading partners to manage their currencies with reference to the sdr, while those that are closely integrated with one particular region could continue to maintain a link to a regional currency ( the dollar, the euro and, in the future, the renminbi ). countries that peg or manage exchange rates vis - a - vis the sdr would presumably choose to accumulate reserves in sdrs rather than in us dollars. second, regular imf allocations of sdrs, and the fact that these would be regarded as “ true ” reserves, would help diminish the pressure for countries to try to accumulate other currencies by maintaining undervalued exchange rates and sterilizing capital inflows, which in the recent past has been a driving factor behind the widening of global imbalances. i think these effects would be important contributions to a more balanced and stable system, although they would be felt only gradually as the sdr increases its role. still, two important issues would remain unresolved. first, exchange rates among the major currencies may continue to undergo wide fluctuations, even though these may have less destabilising effects on third currencies to the extent that many of these would be linked to the sdr. second, since the

periods of stress they may fuel investor risk aversion and market instability, or generate “ flash crashes ” – episodes of sudden and large price changes typically reversed shortly afterwards. a centralised liquidity management tool will function via the so - called “ main cash account ” ( mca ) that participants can open with a national central bank. this account will be linked to the participant ’ s dedicated cash accounts for the new real - time gross settlement ( rtgs ) system, t2s and tips. the mca will also offer a dashboard for a centralised overview of liquidity positions and advanced liquidity management tools, with a higher level of automation. the liquidity held on dedicated cash accounts will be considered for minimum reserve purposes without the need for the accounts holder to transfer the balances back to the mca. the “ new ” digital innovation : what to expect from dlt - based technologies? today much of the debate among market operators and public institutions centres on the novelties brought about by distributed ledger technologies ( dlts ) like blockchains. in turn, much of this interest revolves around the crypto markets. this theme lies outside my focus today. let me mention however that banca d ’ italia is actively engaged in the international fora that are working to define global regulatory standards for these markets, including the financial stability board, the basel committee on banking supervision and the committee on payments and market infrastructure. at the national level, waiting for the coming into force of the european markets in crypto - assets regulation ( micar ), we have been liaising with consob, repeatedly warning retail investors of the risks of this unregulated world. last june we issued a communication on dlt and crypto – assets proposing principles and benchmarks for supervised intermediaries and entities falling within the scope of payment system oversight. 6 coming to dlts use for financial market infrastructure, two main types of claims have been made. according to early - hour proponents of dlts, the technology has the potential to do away with financial intermediaries and their trust - building role : the very key features of the technology – the distributed nature of the ledger, the “ impossibility ” for any single user to tamper with the records once validated – pave the way to a world with a greatly diminished role for intermediaries. this “ decentralized finance ” ( defi ) view emphasizes the self - tending nature of dlts, i. e. their ability to work