The Eurosystem is taking significant steps to modernize financial market infrastructures by expanding its focus on innovative solutions for settling transactions using Bank Money recorded on distributed ledger technology (DLT). This initiative adopts a dual approach, signaling a commitment to both immediate improvements and long-term strategic advancements.
Initially, the Eurosystem will prioritize the development of a robust and efficient platform designed for settlements in central bank money. This platform will be seamlessly integrated with existing TARGET Services, ensuring interoperability and a smooth transition. A detailed timeline for implementation will be announced in the near future, marking a concrete step towards modernizing payment systems. Concurrently, the Eurosystem is also exploring a more comprehensive and forward-looking solution for settling DLT-based transactions in central bank money. This long-term vision includes accommodating international operations, such as foreign exchange settlements, highlighting the global ambition of the project.
This strategic move underscores the Eurosystem’s dedication to fostering innovation within market infrastructures while upholding the critical principles of safety and efficiency that define TARGET Services. The Eurosystem remains committed to actively analyzing emerging technologies and engaging with stakeholders from both the public and private sectors to ensure a collaborative and informed approach.
According to Piero Cipollone, Member of the ECB Executive Board, spearheading this initiative, “We are embracing innovation without compromising on safety and stability.” He further emphasized the initiative’s importance, stating, “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.” This statement reflects the Eurosystem’s balanced approach to innovation, prioritizing both progress and stability in the financial landscape.
This initiative is a key component of establishing a unified European market for digital assets, directly supporting the Governing Council’s objective of promoting a digital capital markets union, as outlined in their statement of 7 March 2024. By embracing digital solutions for bank money settlement, the Eurosystem is actively contributing to the evolution of the financial ecosystem.
The foundation for this initiative is built upon the Eurosystem’s prior exploratory work conducted between May and November 2024, which rigorously examined new technologies for wholesale central bank money settlement. This exploratory phase involved extensive participation from 64 entities, including central banks, financial market participants, and DLT platform operators. Collectively, they conducted over 50 trials and experiments, some involving actual settlement in central bank money, and others utilizing mock settlement scenarios. This thorough testing and experimentation phase underscores the Eurosystem’s commitment to a data-driven and practical approach to innovation in bank money infrastructure.
Media Contact: Nicos Keranis, [email protected], tel.: +49 172 757 7237.
