ECB To Explore Blockchain for Central Bank Money Transactions

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The European Central Bank (ECB) is exploring blockchain technology to improve how central bank money transactions are processed. This bold step could help boost blockchain and cryptocurrency adoption worldwide and modernize payment systems.

The ECB noted in a press release that the Governing Council of the European Central Bank (ECB) has decided to expand its initiative to settle transactions recorded on distributed ledger technology (DLT) in central bank money. The initiative will follow a two-track approach. 

Firstly, the Eurosystem will soon create a secure and efficient platform for central bank money transactions, connecting it with TARGET Services. A detailed timeline for this will be announced later. Secondly, the Eurosystem will explore a more long-term, integrated solution for DLT-based transactions, including international operations like foreign exchange settlements.

“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 engage actively with public and private stakeholders,” the press release noted. 

ECB Executive Board member Piero Cipollone commented that the ECB is embracing innovation while ensuring safety and stability. He believes this innovation will improve the efficiency of European financial markets. He highlighted that their approach will focus on helping the Eurosystem create a more unified and integrated European financial ecosystem.

As per the bank, the initiative will help create a unified European market for digital assets, supporting the Governing Council’s goal to promote a digital capital markets union, in its statement of March 7, 2024.