The Eurosystem has successfully completed the first trial in utilizing new technologies for settling wholesale transactions in central bank money.
Spearheaded by Oesterreichische Nationalbank, the initiative aims to explore the interaction between TARGET Services and distributed ledger technology (DLT) platforms, potentially revolutionizing wholesale financial markets.
Initially, 16 private companies have been enlisted to participate in trials involving actual settlement in central bank money, along with experiments in mock settlement in test environments. This experimental phase, slated to span the next six months, is expected to furnish the Eurosystem with invaluable insights into the feasibility and benefits of incorporating new technologies into wholesale financial markets.
The primary focus of the inaugural experiment, conducted by Oesterreichische Nationalbank, centred on the tokenisation and simulated delivery-versus-payment (DvP) settlement of government bonds in a secondary market transaction against central bank money. This milestone marks a significant step forward in the exploration of DLT’s potential in enhancing settlement processes.
Preparations are underway for subsequent trials and experiments, which will encompass various use cases such as DvP transactions in primary and secondary markets, securities lifecycle management, automated wholesale payments, and payment-versus-payment transactions. Key performance indicators will be employed to evaluate the outcomes, with assessments conducted in collaboration with participating companies.
This initiative underscores the Eurosystem’s commitment to fostering innovation in wholesale finance and its proactive stance in exploring the integration of DLT into central bank money settlement processes. As the trials progress, the financial landscape may witness transformative changes, paving the way for enhanced efficiency and security in wholesale transactions.
“Today’s successful completion of the experiment represents a significant milestone in our exploration of new technologies for wholesale financial market operations. This initiative underscores our commitment to fostering innovation and enhancing the efficiency of central bank money settlement processes,” said a Eurosystem Representative
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