Share this article
Bank of England: DLT Shift Could Lead to New Securities Monopolies
The U.K.'s central bank has warned that a shift to DLT could bring about both positive and unwelcome changes in the securities settlement industry.
Updated Sep 13, 2021, 6:52 a.m. Published Aug 28, 2017, 2:59 p.m.
Make us preferred on Google
Researchers for the UK's central bank have argued in a new paper that, if left unregulated, securities settlement services built on distributed ledger tech (DLT) could turn into monopolies.
In a new research paper, entitled "The economics of distributed ledger technology for securities settlement", Bank of England staffers Evangelos Benos, Rodney Garratt and Pedro Gurrola-Perez posits that such an outcome is a possibility, even if the tech itself brings positive changes to the overall structure of the securities settlement sector.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
The authors of the paper reason that, as with the current settlement industries, DLT-based services have the potential to become "concentrated among [a] few providers]". Under this scenario, market participants could become more susceptible to price discrimination or inefficient pricing. Service providers, the authors argue, could wind up "capturing much of the market surplus" simply because the industry itself is more naturally susceptible to monopolistic structures.
That said, the research paper does strike a cautiously optimistic tone, positing that the tech could rewrite how the settlement process works for those involved in its day-to-date operation.
The authors wrote:
"...DLT has the potential to improve efficiency and reduce costs in securities settlement, but the technology is still evolving and it is uncertain at this point what form, if any, a DLT-based solution for securities settlement will ultimately take..."
They go on to state that distributed ledgers could "potentially allow for a complete disintermediation of the whole post-trade process, from security issuance to settlement, enabling a pure P2P transaction structure."
Indeed, the Bank of England is one of the most proactive central banks on distributed ledger and blockchain technology, and has previously said that it will build the next version of its official settlement system to be compatible with distributed ledger tech.
Notably, the bank's governor, Mark Carney, said in January that the technology could "reshape" the banking industry.
Bank of England image via Shutterstock
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Here's what bitcoin bulls are saying as price remains stuck during global rally
It's about a lot more than "zooming out." Supply overhangs and investor "muscle memory" regarding gold help explain bitcoin's poor absolute and relative performance.
What to know:
- Bitcoin has failed so far to act as an inflation hedge or safe-haven asset, lagging badly behind gold, which has surged amid high inflation, wars, and interest rate uncertainty.
- Crypto advocates argue that bitcoin’s weakness reflects a temporary supply overhang, investor “muscle memory” favoring familiar precious metals and its correlation with risk assets, rather than a collapse in long-term demand.
- Many bitcoin proponents still see BTC as a superior long-term store of value and “digital gold,” predicting that, once traditional hard assets are overbought, capital will rotate into bitcoin, allowing it to “catch up” to gold.
Top Stories
