ECB plots new platform for DLT transaction settlements with central bank money
The European Central Bank (ECB) has outlined plans to develop a new platform that will enable the settlement of transactions using central bank money on distributed ledger technology (DLT).
ECB to develop new DLT platform
The platform forms part of the central bank’s “two-track approach” to refining transaction speed and will be linked to Target Services, part of the ECB’s existing infrastructure for payments.
The central bank has not disclosed an official timeline for development, instead stating that “a concrete time plan will be announced in due course”.
Part two of this approach will see the ECB explore “a more integrated, long-term solution for settling DLT-based transactions in central bank money”, aiming to include international transactions like foreign exchange settlements.
This is expected to be a more long-term initiative, inclusive of public and private stakeholder engagement, and would likely require more complex development.
In comments, ECB executive board member Piero Cipollone, who is overseeing the initiative, emphasises that while the central bank is embracing innovation, it will not compromise on safety or stability.
“Our approach will pay due attention to the Eurosystem’s goal of achieving a more harmonised and integrated European financial ecosystem,” states Cipollone.
Previous efforts to establish an integrated European market for digital assets include the Eurosystem’s exploratory work on new technologies for wholesale central bank money settlement.
These trials, conducted between May and November last year, involved actual settlement using central bank money, while experiments tested mock settlement.
