Crypto Means Business

European Banking Association Emphasizes Promise of Distributed Ledgers

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EBA: Central banks could use technologies like Ripple to facilitate real-time settlement. Image: European Banking Association

The European Banking Association (EBA) has published a new research paper analyzing the innovation and use cases of distributed consensus ledgers.

Presented by the EBA Working Group on Electronic Alternative Payments, the paper outlines “the practical implications of cryptotechnologies from the perspective of transaction banking and payment professionals.”

“Cryptotechnologies are a key subject for further study for transaction banking and payment professionals, especially against the background of evolving financial infrastructures,” said Vincent Brennan, EBA board member and Deputy Chairman of the Bank of Ireland.

Notably, the EBA paper perceives the distributed ledger to be the driving innovation:

At the core of this invention is the concept of ‘distributed consensus ledgers.’ These ledgers make it possible to jointly create, evolve and keep track of one repository of transactions or other successive events over a shared network (documenting, for instance, the ownership of value) without maintenance or administration by a central authority.

The paper describes Ripple as an “asset-centric technology”, which “focus on the exchange of digital representations of existing assets (e.g. currencies, metals, stock, bonds etc.) in combination with a shared ledger”.

The EBA presents four potential use cases for asset-centric technologies including remittance and real-time settlement, noting that technologies like Ripple “merit close attention in the context of the current European drive towards achieving ‘instant payments’ and in relation to inter-PSP payment systems in general.” The paper includes Fidor’s implementation of Ripple as a real-world example.

Of the four categories the paper defines, the EBA concludes that asset-centric technologies like Ripple hold the most promise, advising the industry to “stay aware of developments.”

Currently, asset-centric developments are potentially the most interesting cryptotechnology-related category for transaction banking and the payments industry. This conclusion has been drawn based on the fact that developments in other areas are still impeded by technological and regulatory challenges, even though these other categories also hold considerable future promise.


Asset-centric developments have potential and current applicability regarding today’s activities of financial service and payment organisations, because they can operate in an integrated fashion with legacy IT, legal frameworks and existing assets (currencies, stock, bonds etc).

Read the full EBA paper here.

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