Exploratory work on new technologies for wholesale central bank money settlement
The money that we create at the ECB is called central bank money. Banks already access a form of central bank digital money when they participate in real-time gross settlement systems that are owned and operated by central banks. These systems are used to settle wholesale payments related to monetary policy operations and bank-to-bank transactions.
Work on how wholesale financial transactions recorded on distributed ledger technology platforms could be settled in central bank money is underway. The purpose of the initiative is to (i) consolidate and further develop the ongoing work of Eurosystem central banks in this area, and (ii) gain insight into how different solutions could facilitate interaction between TARGET Services and distributed ledger technology platforms.
New Technologies for Wholesale settlement Contact Group
A dedicated market contact group, the New Technologies for Wholesale settlement Contact Group (NTW-CG) has been set up to support the Eurosystem’s exploratory work. This group provides expert input and keep the Eurosystem up to date with advances in the use of distributed ledger technology and other new technologies in wholesale financial markets. The NTW-CG has no formal advisory or steering role with respect to the Eurosystem exploratory work.
To ensure openness and broad representation, membership is subject to an annual review. Market participants are welcome to express their interest in joining the NTW-CG by submitting the application form and relevant documentation to the NTW-CG Secretariat at the latest by 15 May of each year.
The Eurosystem invites financial market stakeholders to join the exploratory work on new technologies for wholesale central bank money settlement planned for 2024. The work consists of trials and experiments for using central bank money to settle securities and payments recorded on distributed ledger platforms. Interested participants can apply until 30 April 2024.
Material on the three Eurosystem solutions can be found in the slides and the recording of a Focus Session from 15 December 2023.