The European Central Bank (ECB) is taking steps to enable distributed ledger technology (DLT) transactions to be settled in fiat currency, focusing on innovation while maintaining financial stability.
Two-Track Strategy for DLT Integration
The ECB’s approach involves:
- Short-Term Goal: Developing a platform to settle DLT-based transactions in central bank money via an interoperability link with Target Services.
- Long-Term Vision: Exploring a more integrated solution for DLT settlements, including international operations such as foreign exchange settlements.
Embracing Innovation with Stability
Piero Cipollone, ECB Executive Board member, states:
“We are embracing innovation without compromising on safety and stability. This is an important contribution to enhancing European financial market efficiency through innovation.”
The initiative aligns with the Eurosystem’s goal of building a more harmonised and integrated European financial ecosystem.
