The European Central Bank (ECB) has shared its direction for exploring wholesale central bank digital currency (wholesale CBDC) following the first meeting of the “New Technologies for Wholesale settlement Contact Group.” Exploratory work will start in 2024, and the ECB is considering a broad array of options to enable settlement of DLT transactions beyond a simple wholesale CBDC or trigger payment solution.
At a high level the ECB outlined four potential pathways. The first two are those commonly considered: connecting to a conventional central bank payment system versus a standalone wholesale CBDC solution which is interoperable with market DLT networks.
It additionally outlined an “integration” approach with the Eurosystem creating a T2S (Target 2 Securities) DLT network for securities settlement. Another “distribution” option is for a wholesale CBDC issued onto DLTs shared with market participants.
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