European Central Bank develops platform, which will interact with the existing trans-European payment system TARGET Services.
20 February 2025
Eurosystem steps up efforts for innovative market infrastructures
Two-track approach: develop a solution that is interoperable with existing infrastructures; look for a long-term integrated solution
The Governing Council of the European Central Bank (ECB) has decided to expand its initiative to settle transactions recorded using distributed ledger technology (DLT) in central bank money. The initiative will follow a two-pronged approach. First, as soon as possible, the Eurosystem will develop and implement a safe and efficient platform for such settlements in central bank money through an interoperability link with TARGET Services. A specific timetable will be announced in due course. Second, the Eurosystem will seek a more integrated, long-term solution for the settlement of DLT-based transactions in central bank money. This will also include international operations such as foreign exchange settlement.
The Eurosystem wants to support the use of innovative solutions in its market infrastructures while maintaining the safety and efficiency of TARGET services. It will continue to further analyse new technologies and actively engage with public and private stakeholders.
"We embrace innovation without compromising safety and soundness," said ECB Executive Board member Piero Cipollone, who is leading the initiative. "This is an important contribution to increasing the efficiency of the European financial market through innovation. Our approach will give due attention to the Eurosystem's objective of achieving a more harmonised and integrated European financial ecosystem."
The initiative will contribute to the creation of an integrated European market for digital assets, in line with the Board's call to promote a Digital Capital Markets Union in its statement of 7 March 2024.
It will build on the Eurosystem's exploratory work on new technologies for wholesale central bank cash settlements carried out between May and November 2024. This work enabled 64 participants - including central banks, financial market participants and DLT platform operators - to conduct over 50 trials and experiments. The trials involved actual settlement in central bank money, while the experiments were tests with fake settlement.