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Holger Neuhaus

8 January 2024
Economic Bulletin Issue 8, 2023
Through its TARGET Services, the Eurosystem facilitates the settlement of wholesale financial transactions in central bank money, the safest and most liquid settlement asset. Settling such transactions in central bank money helps to reduce risks to the financial system and to support financial stability and trust in the currency. The Eurosystem is continuously modernising its settlement infrastructures and adapting to changing user needs. In line with its commitment to provide settlement in central bank money via infrastructures that are fit for purpose – that is, to enable safe and efficient settlement services that meet the needs of their users – the Eurosystem has recently started analysing the impact of the emergence of new technologies, such as distributed ledger technology (DLT). This article describes the findings from Eurosystem market outreach activities regarding the expected future use of DLT for wholesale financial transactions, discusses possible Eurosystem responses to a significant industry uptake of these new technologies, and outlines the Eurosystem’s plans to further explore how wholesale financial transactions recorded on DLT platforms could be settled in central bank money.
JEL Code
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies