ECB Expands Initiative for DLT-Based Settlements

The European Central Bank (ECB) is expanding its program for central bank money settlements based on distributed ledger technology (DLT).

The ECB Governing Council approved a two-phase approach to implementing DLT-based central bank money settlements. The first phase involves integration with the TARGET interbank payment system, and the second phase aims to develop a fully integrated settlement solution for digital assets, including cross-border payments and currency exchange.

The primary goal of this initiative is to develop an interoperable platform that connects DLT transactions with TARGET Services, the eurozone’s core settlement system. The timeline for implementation will be announced later.

The project seeks to create a unified environment for digital asset settlements, ensuring security, efficiency, and compliance with European regulatory standards. The ECB plans to collaborate with public institutions and the private sector to analyze new technologies and integrate them into the financial market infrastructure.

Moreover, the initiative supports the formation of a unified European digital capital market. The technical foundation is based on research and testing conducted in 2024. The project involved 64 organizations, including central banks, financial institutions, and DLT platforms, which carried out over 50 test transactions, including CBDC trials, and simulated various digital asset use cases.