First DLT-related experiment for settlement in central bank money successfully completed

14 May 2024

Yesterday, the Eurosystem successfully completed the first experiment in using new technologies for the settlement of wholesale transactions in central bank money.

Initially, 16 private companies have been onboarded and will conduct trials involving actual settlement in central bank money and experiments with mock settlement in test environments. The exploratory work will provide the Eurosystem with insights into how the TARGET Services and distributed ledger technology (DLT) platforms could interact and into the potential merits of using new technologies in wholesale financial markets. The ECB and the national central banks of the euro area are among the first central banks to explore actual central bank money settlement of wholesale financial transactions using such technologies.

Trials and experiments will be conducted over the next six months on the three Eurosystem interoperability-type solutions proposed for central bank money settlement of wholesale financial transactions recorded on DLT platforms. The first experiment, carried out by Oesterreichische Nationalbank, covered the tokenisation and simulated delivery-versus-payment (DvP) settlement of government bonds in a secondary market transaction against central bank money.

Preparations for further trials and experiments are ongoing and will cover a variety of use cases, including DvP transactions in primary and secondary markets, securities lifecycle management, automated wholesale payments and payment-versus-payment transactions.

A set of key performance indicators will be used to assess the results of the trials and experiments. The assessment will be performed in cooperation with the participating companies.

In December 2023 the Eurosystem launched a call for expression of interest in exploratory work on the three interoperability solutions proposed by the Eurosystem and detailed these in the annexes to the notice.