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The European Central Bank (ECB) has announced an expansion of its initiative to settle distributed ledger technology (DLT)-based transactions in central bank money.
The scheme would be a wholesale counterpart to its retail central bank digital currency (CBDC) project.
The bank’s move is part of a broader effort to modernise market infrastructures while improving the safety and efficiency of existing payment systems.
“We are embracing innovation without compromising on safety and stability,” said ECB executive board member Piero Cipollone, who oversees both the wholesale initiative and retail CBDC work with the digital euro.
“This is an important contribution to enhancing European financial market efficiency through innovation. Our approach will pay due attention to the Eurosystem’s goal of achieving a more harmonised and integrated European financial ecosystem.”
The initiative will follow a two-track approach. In the short term, the Eurosystem will develop an interoperability link between DLT platforms and its existing TARGET services, with a timeline for implementation being announced soon.
In the long term, the ECB will explore a fully integrated solution for DLT-based settlements, including international transactions such as foreign exchange settlements.
This expansion builds on trials conducted in 2024, involving 64 participants, which included central banks such as Germany’s Bundesbank and the Bank of Lithuania and financial institutions such as Deutsche Bank and BNP Paribas.
