Bulletin article discusses how distributed ledger technology can change payments

Release date
28 May 2018

An article published today in the Reserve Bank Bulletin describes the role of Distributed Ledger Technology (DLT), which underpins crypto-currencies, and compares the ways it can improve on, or fall short of, existing payments systems.

The article reports that Blockchain, the DLT that underpins bitcoin, has benefits in terms of speed of cross-border settlement, and removes single-point-of-failure problems; but slows the speed and increases the cost of smaller domestic transactions. Although some central banks have experimented with other forms of DLTs to try to overcome these drawbacks, the article finds that most of these DLT experiments result in technology that is similar to existing payments systems and do not offer many additional benefits.

This article by Amber Wadsworth is the second of a series being released on digital currency, the technologies underpinning it, and some of the issues associated with such currencies. These articles do not propose a design for a digital currency or suggest the RBNZ will issue one itself.

More information
Read the ​Bulletin​ article: Decrypting the role of distributed ledger technology in payments processes.

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