ECB’s Cipollone: If We Fail to Act on Tokenisation, Fragmentation Could Emerge as Risk

7 October 2024

By Marta Vilar – MADRID (Econostream) – European Central Bank Executive Board member Piero Cipollone said on Monday that the potential of tokenisation technologies should not be ignored by public authorities, lest the risk of fragmentation emerge.

Speaking at the Bundesbank Symposium on the Future of Payments, Cipollone said that ‘[i]f public authorities fail to act [on technologies like tokenisation], this could lead to fragmentation.’

A shift from the old intermediation system to one based on distributed ledger technology could mitigate this risk, promote competition and foster capital market integration in Europe, he said.

‘[W]e have to adapt to the evolving technological landscape that is reshaping how money is exchanged and financial transactions are settled in an increasingly digital world’, he said.

Cipollone cited estimates showing that automation and smart contracts could decrease ‘annual infrastructure operational costs by approximately $15-20 billion in global capital markets’.