Central ledger

A ledger used in centralised entities to keep record of financial transactions. A central ledger is a single, authoritative database maintained by a central entity, such as a bank, government agency, or financial institution. It records all transactions within the system, ensuring that balances and transfers are accurate and consistent. Unlike decentralized ledgers (such as those used in blockchain systems), a central ledger relies on a trusted third party to manage and validate transactions. For example, a bank’s internal system that tracks customer deposits, withdrawals, and transfers is a type of central ledger. While efficient and straightforward, central ledgers are often criticized for being vulnerable to fraud, errors, and misuse due to their reliance on a single controlling entity.