The European Central Bank's Governing Council has given the green light to a research initiative that aims to utilize central bank-issued money for settling transactions based on distributed ledger technology. This effort seeks to enhance the efficiency of the bank's payment systems. Two key projects, 'Pontes' and 'Appia', are being developed to achieve this goal. 'Pontes' will establish a connection between distributed ledger technology platforms and the Eurosystem's TARGET services, facilitating the flow of cash and securities across Europe, with a pilot launch scheduled for the third quarter of 2026.
The 'Appia' project, on the other hand, will focus on enabling global operations and analyzing DLT-based solutions. This development reflects the ECB's ongoing exploration of distributed ledger technology to improve payments settlement, an area of interest for central banks worldwide.
A recent report published by the ECB highlights the benefits of DLT, including reduced costs and mitigated credit and settlement risks, following an exploratory study on wholesale central bank money settlement conducted between May and November 2024.