The Eurosystem has begun a series of trials to experiment with the use of distributed ledger technology (DLT) for settling wholesale central bank money (CeBM). The project aims to provide “insights into how the TARGET services and DLT platforms could interact” and explore “the potential merits of using new technologies in wholesale financial markets”, reveals a press release from the European Central Bank (ECB).

A total of 16 private companies have signed up for the first wave of the trial. Launched on 13 May, it begun with a focus on “actual settlement in central bank money and experiments with mock settlement in test environments”.

First in line

The trials have already seen their first completed experiment – a simulation conducted by Austria’s Oesterreichische Nationalbank. It looked at the tokenisation and delivery-versus-payment (DvP) settlement of government bonds in a secondary market transaction against CeBM.

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More trials and experiments will follow over the next six months to study three Eurosystem interoperable solutions. A number of use cases will be covered, including DvP transactions in both primary and secondary markets, securities lifecycle management, automated wholesale payments, and payment-versus-payment (PvP) transactins. The results of the trials will be evaluated based on a set of pre-defined key performance indicators.