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The Eurosystem has embarked on the first phase of a series of trials aimed at assessing the feasibility of using distributed ledger technology (DLT) for settling wholesale transactions in central bank money.
In the initial phase, 16 private entities, including 10 market participants and six market DLT operators, have been enlisted, alongside five central banks, to participate in live trials involving actual settlement in central bank money. Additionally, mock settlement experiments will be conducted in test environments.
The inaugural trial, conducted by Oesterreichische Nationalbank, focused on the tokenisation and simulated delivery-versus-payment (DvP) settlement of government bonds in a secondary market transaction using central bank money.
Preparations are underway for further trials and experiments, which will encompass a range of use cases. These include DvP transactions in both primary and secondary markets, securities lifecycle management, automated wholesale payments, and payment-versus-payment transactions.
Over the next six months, the trials will provide the Eurosystem with valuable insights into the potential interaction between the Target settlement system and DLT platforms, as well as the possible benefits of incorporating new technologies into wholesale financial markets.
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