Today, Fabio Panetta, a board member of the European Central Bank (ECB) spoke about stablecoins and the work on a digital euro during a Bundesbank speech. Panetta chairs Europe’s High Level Task Force on central bank digital currency (CBDC).
He said the ECB and national central banks are exploring four areas. The first is to see whether the central bank settlement system TIPS could support a scenario with hundreds of millions of customers. Currently, only eligible payment providers directly access TIPS where settlement requires central bank money.
Secondly, the interoperability between centralized systems and distributed ledger technology (DLT) will be explored. For businesses, one of the key demands for a CBDC is to be able to settle transactions instantly on-ledger. The key point here is the CBDC may not be on-ledger.
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