ECB outlines conditions for tokenization to improve capital markets

The European Central Bank (ECB) has stated that tokenization technology can improve the efficiency of European capital markets, but only if three prerequisites are met: a foundation in central bank money, interoperable infrastructure, and appropriate regulation. In a macroprudential report released on April 13, the ECB explained that Distributed Ledger Technology (DLT) could help strengthen savings and investment functions within the European Union (EU), Cointelegraph reported. However, the bank noted that this potential depends on how effectively infrastructure and policy authorities can address new risks.