ECB names participants for new trials to explore settlement of wholesale transactions in central bank money
The European Central Bank (ECB) has revealed the first cohort of financial institutions set to take part in its first wave of trials as it looks to explore new technologies for the settlement of wholesale transactions in central bank money.
ECB to explore settlement of wholesale transactions in central bank money
For this first round of trials, the ECB’s governing council has approved the involvement of ten market entities with access to TARGET (a collection of financial market infrastructure services operated by the Eurosystem) and six distributed ledger technology (DLT) providers.
The project will see participation from the following European central banks: Deutsche Bundesbank, Banque centrale du Luxembourg, Banque de France, Banca d’Italia, and Oesterreichische Nationalbank.
This group of financial institutions came forward following a call for interest by the Eurosystem last December.
The testing will begin on 13 May this year, with the project participants having already presented business proposals to examine wholesale transactions recorded on DLT platforms with settlements in central bank money. The trials will look to explore several use cases, such as cross-border payments and payment-versus-payment transactions.
Furthermore, the testing will look to explore use cases in the securities settlement cycle, which includes secondary market transactions, the lifecycle management of securities, and the delivery-versus-payment mechanism.
While the ECB has announced the participants for its initial trial phase, the central bank has also opened another call for interest, which will remain open until 30 April. This call is for participation in a second wave of testing scheduled to take place between July and November 2024.
The ECB has recently been ramping up its work around a potential digital euro, with the central bank issuing five single contract tenders and procurement opportunities for the project this year, after it officially entered its preparation phase last November.
