The Eurosystem has launched the first in a series of trials to explore the application of distributed ledger technology (DLT) for settling wholesale transactions in central bank money.
Initially, 16 private companies—comprising 10 market participants and six market DLT operators—alongside five central banks have been engaged to conduct live trials that involve actual settlements in central bank money as well as tests in simulated environments.
The first experiment, conducted by Oesterreichische Nationalbank, focused on the tokenization and simulated delivery-versus-payment (DvP) settlement of government bonds in secondary market transactions using central bank money.
Preparations for additional trials are underway, targeting various scenarios, including DvP transactions in both primary and secondary markets, securities lifecycle management, automated wholesale payments, and payment-versus-payment transactions.
These trials will span the next six months, providing the Eurosystem with valuable insights on the interaction between the Target settlement system and DLT platforms, as well as the potential advantages of integrating new technologies into wholesale financial markets.