ECB proposes unified ledger for European digital assets

European Central Bank (ECB) executive board member Piero Cipollone has proposed the creation of a unified European ledger to streamline digital assets and financial transactions across the continent.

The idea, introduced during a symposium hosted by the German central bank, aims to enhance efficiency in capital markets by addressing the fragmentation caused by differing national regulations.

According to Cipollone, more than 60% of European banks are already exploring or experimenting with distributed ledger technology (DLT), while 22% have actively implemented it.

However, he pointed out that despite the promise of DLT, it has not yet delivered full financial integration.

He noted, "Non-interoperable technological ecosystems in each country—shaped by diverging national regulatory regimes—have created siloed pools of asset liquidity, further entrenching fragmentation."

Cipollone emphasised the need for a digital capital markets union, a platform where digital assets, central bank money, and securities could coexist seamlessly, reducing costs and enabling continuous operation.

“Our primary objective in this evolving landscape is to ensure that central bank money—the safest and most liquid settlement asset—remains a cornerstone of stability, even in a capital market based on tokens and DLT,” he said.

The concept of a unified ledger, where cash and assets are stored on the same platform, has also garnered interest from global institutions such as SWIFT and JPMorgan.

While the idea has many benefits, Cipollone acknowledged that it could also stifle innovation by limiting the flexibility needed for certain narrow use cases.