Blockchain Can Have Profound Impact On The Whole Financial Ecosystem, Says ECB Board Member

The buzz around blockchain technology reached new heights last year, with major banks and tech giants undertaking research to discover relevant use cases. The trend seems to be continuing this year.

Recently, Yves Mersch, member of the executive board of the European Central Bank (ECB), shared his views on the technology while addressing a Bank of France Conference in Paris on 18th January, in a speech titled “Card payments in Europe – latest trends and challenges”, CoinDesk reported.

“The emergence of innovative payment solutions will impact payment behaviour and the usage of cards and other traditional payment instruments in the years to come”, he said.

He further said that the card industry will be challenged by strong competition from innovative payment solutions based on payment instruments other than cards. Elaborating more on the challenges, Mersch noted that distributed ledger technologies have the potential to impact the whole financial industry.

“There is the challenge of distributed ledger technologies. These technologies, of which Blockchain is probably the best-known example, can potentially have a profound impact on the whole financial “ecosystem””, Mersch added. “Their adoption has the potential to disrupt both the use of “traditional” payment instruments and services and the payments processing industry.”

He emphasized that the card industry will face competition from instant payments based on the SEPA credit transfer, from payment initiation services in the area of e-commerce and from the adoption of distributed ledger technologies.

Mersch concluded his speech saying, "This competition is welcome, provided the solutions offered in the market are secure and efficient and service providers play by the same rules. I am confident that the cards industry will find the right responses to these challenges – and to the benefit of users."