The Eurosystem has been exploring the potential of distributed ledger technology (DLT) for settling wholesale transactions in central bank money. This initiative, conducted between May and November 2024, involved 64 market participants from various sectors and countries. The aim was to understand how DLT could improve financial transaction settlements and address current inefficiencies in capital and payment markets.
Throughout the trials, nearly €1.6 billion in central bank money was settled using DLT. The work included real transactions and mock scenarios to test different use cases. Notable examples were a €300 million digital bond issuance by Siemens AG, Slovenia’s inaugural digital bond as an EU sovereign, and Italy’s first digital bond under its “fintech” decree-law.
The exploratory work used three solutions: the Trigger Solution by Deutsche Bundesbank, Full DLT Interoperability solution DL3S by Banque de France, and TARGET Instant Payment Settlement (TIPS) Hash-Link by Banca d’Italia. These solutions provided insights into how financial markets might integrate DLT into their operations.
Market participants expressed interest in further developing DLT for wholesale financial markets. They noted that tokenisation could bring technical improvements and reshape the ecosystem by making markets more contestable.
Feedback from the New Technologies for Wholesale settlement Contact Group highlighted the need for a Eurosystem short-term offering to settle DLT-based transactions in central bank money promptly after this exploratory phase. In February 2025, the ECB announced plans to expand its initiative for settling such transactions with a two-track approach: developing a safe platform linked with TARGET Services and exploring long-term integrated solutions.
The Eurosystem remains committed to providing central bank money for wholesale settlement through its TARGET Services while monitoring developments in innovative technologies like DLT. It aims to support a sustainable digital capital markets union (CMU) and savings and investments union (SIU) in Europe without compromising safety or efficiency.
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