Blockchain technology as yet fails to meet the very high demands of a financial market infrastructure, said the De Nederlandsche Bank (DNB) after a three-year period of experimentation. Among the principal limitations are capacity shortages, inefficiency caused by high energy consumption, and a lack of full certainty that a payment is completed. However, blockchain technology could improve a financial market infrastructure’s resilience to external attacks, at the expense of its capacity and efficiency.
By way of experiment, DNB has developed and evaluated four prototypes with distributed ledger technology over the past three years. The aim was both to build up knowledge and to test to what extent these technologies are useful for improvements in payment and securities traffic. DNB said it finds blockchain, interesting and promising, and perhaps new algorithms will meet all the requirements for FMIs in the future. That is why the central bank continues to invest in knowledge of this technology and is experimenting with it, while also conducting discussions with new and existing parties in the market about possible applications, in order to contribute to innovation from its role.