Following a consultation involving 125 responses, the European Central Bank (ECB) today announced plans to extend aspects of its TARGET settlement infrastructure, though the real time gross settlement (RTGS) system itself will not gain additional hours in the short term. While the initial steps aim to address liquidity challenges with instant payment system TIPS, this will also impact Pontes, the European system for wholesale DLT settlement including tokenized central bank money.
The initial version of Pontes is aiming to launch in September 2026 with limited operating hours. This will be upgraded over time to the enhanced version in 2028, by which time the solution will be functional 24/7. Potential 24/7 liquidity needs for the digital euro were also mentioned.
The mismatch between central bank opening hours and DLT payment systems is not limited to Europe. This topic came up yesterday during the unveiling of the Project Agorá prototype for DLT cross border payments involving seven central banks and spanning five time zones. The BIS acknowledged the need for central banks to move towards 24/7 in a DLT world. While the aim is to enable real time payments 24/7, that can only work if cash is available on the DLT platform. If the money is sitting in a bank’s conventional RTGS account, that won’t help with out-of-hours DLT payments because the RTGS is closed. It’s possible to leave extra money on the DLT platform, whether that’s Agorá or Pontes, but that has the downside of fragmenting pools of money, and potentially denting interest income.
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