Distributed Ledger Technology Niches and Experimentation in Central Banks Payment Systems Functions: A Thematic Analysis

Abstract

Distributed ledger technology (DLT) has the potential to transform the current centralized architecture of traditional payment systems. In this paper, applying a multivocal literature review and a thematic analysis to analyze the grey and academic literature, we identify and categorize the use cases related to DLT-based applications in central bank payment systems functions. We identified six DLT-based use cases as real-time gross settlement systems, cross-border settlements arrangements, infrastructure for central bank digital currencies, information registry and data sharing, and digital know your customer/anti-money laundering applications. Furthermore, we explore the motivation behind adopting DLT and the role of central banks for applicable use cases. Our findings show that the primary and recurrent theme on motivation across the different use cases is to improve efficiency compared to conventional systems. The range of DLT platforms and consensus algorithms that we identified indicates that there is no universal solution that can be applied in all cases. Finally, we provide insights into the current state of research in this niche area. We observe that the practical implementation of the use cases is mostly discussed in the grey literature, which emphasizes its importance in providing complementary perspectives on the practical and theoretical aspects of the use cases.