A Central Ledger is an accounting system in which all financial transactions are recorded in one central location. It is controlled and maintained by a central agency. As a result, the Central Ledger is vulnerable to fraud. In the modern-day accounting system, the central ledger holds both financial and non-financial data.
The concept of a Central Ledger evolved from the double-entry ledger, a method that revolutionized accounting and banking. This type of ledger also greatly improved the accuracy of records in the ledger. It was first used by banks in 1494, when Lucia Pacioli published a book defining the standards for a double-entry ledger. As banks began to expand their role as trusted intermediaries between lenders and savers, they developed a central ledger to record their transactions.