Current State of DLT and Stablecoins in Finance

This technical report discusses the current state of Distributed Ledger Technology (DLT) and stablecoins in the financial sector, presented by Paolo Angelini, Senior Deputy Governor of Banca d’Italia. The report outlines the evolution of DLT since the introduction of the Bitcoin protocol in 2008 and examines its potential to transform financial services. It highlights that while fully automated financial services have not yet materialized, DLT is gradually being integrated into financial infrastructures. The report categorizes DLT applications into crypto assets, asset tokenization, financial market infrastructure, and payments, with a focus on stablecoins. It reviews various initiatives and projects that indicate a growing acceptance of DLT in finance, including the emergence of stablecoins as a significant component of payment systems. The report concludes with reflections on the implications for central banks and regulatory frameworks, emphasizing the need for governance and compliance in the adoption of DLT and stablecoins.