Central Banking

DLT not ready for retail payments – Bundesbank

German central bank says retail payment systems are already sufficient to support fast transfers; DLT could be used to streamline global payment processes

There is “little prospect” of distributed ledger technology being put into widespread use in the field of retail payments in its current state, the Deutsche Bundesbank has concluded.

“The systems in operation have already been optimised for fast transfers and require a minimum of reconciliation, besides being able to process millions of transactions with ease every day,” the German central bank says.

The Bundesbank’s findings form part of an analysis that examines whether DLT holds any promise for the financial sector.

“Potentially, DLT offers a number of benefits on account of the distributed storage of data, which can eliminate reconciliation processes associated with complex work-sharing value-added chains,” the bank’s payment specialists write.

International payments could be one such avenue, as they often take longer because more intermediaries are involved than in the case of transactions within the euro area.

Payments conducted outside the eurozone are frequently settled through correspondent banking networks. “For payments like this, DLT could streamline a number of process steps, and offer faster and cheaper settlement for end-users,” says the Bundesbank.


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