The Association for Financial Markets in Europe (AFME) has released a response expressing support for the European Central Bank’s (ECB) expanded initiative for settling DLT-based transactions in central bank money. The response was made following the ECB’s announcement that it is looking to implement an interoperability solution that will make such transactions possible “in the shortest feasible time frame”.
AFME is in favour of linking the interoperability solution to the existing Target infrastructure, stating that “this would ensure the most substantial degree of legal certainty and enables swift implementation and adoption by market participants”. The association also suggests that the ECB takes account of “other important considerations”, particularly “the ability of market participants to efficiently manage central bank reserves and avoid liquidity fragmentation”, when studying which interoperability solution to implement.
James Kemp, managing director and head of technology and operations at AFME, says, “The swift implementation of an interoperability solution will serve as an important enabler to the further scaling of DLT-based capital markets in Europe and is key in supporting Europe’s leadership position in DLT adoption”.
