Today the Association for Financial Markets in Europe (AFME) published a paper outlining two critical steps needed to scale DLT in capital markets in the European Union. First is the urgent need for a settlement solution for tokenized assets using central bank money. Secondly, AFME wants to see tokenized securities being considered eligible as collateral when banks borrow money from their central bank.
While the European Central Bank (ECB) already announced plans for central bank money DLT settlement in February, AFME reiterated the urgency for an interim solution.
The ECB’s plans involve an interim solution that will be available relatively quickly, and a longer term wholesale central bank digital currency (wCBDC) solution. It follows the participation of 64 institutions in wholesale DLT trials during 2024 involving three different technology solutions. Two of those linked to existing payment systems and the third was a wCBDC.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
