To date, the European Central Bank’s (ECBs) work on central bank digital currency (CBDC) has focused on a retail or consumer-facing CBDC. In a speech today, ECB board member Fabio Panetta confirmed the central bank is starting to evaluate whether or not to enable a wholesale CBDC for the settlement of DLT-based securities transactions amongst institutions. Sources previously told Ledger Insights that banks have been canvassed on the topic by the ECB in the last few months. Update: on June 2023 ECB position.
Interbank CBDC is an area that the Banque de France has targeted and the French central bank previously stated it planned pilots in 2023.
Many institutions are exploring using DLT platforms either to tokenize assets such as security tokens or for using blockchain for post-trade settlement of transactions. This can provide significant efficiencies, enable faster settlement, longer transaction hours and reduce counterparty risks.
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