Earlier this month, the European Central Bank (ECB) held the third meeting about wholesale settlement for DLT networks, including a wholesale CBDC. It proposed a schedule, starting with a call for participation in November. It also shared its views on the BIS concept of the Unified Ledger.
Three months ago, the ECB outlined three interoperability solutions to test during the wholesale DLT trials – two trigger solutions linked to the Target 2 system and the Banque de France’s wholesale CBDC. These are all considered as ‘interoperability’ solutions because there will be no ‘integration’ between central bank money and the separate DLT networks. However, it will continue to research integration solutions but won’t test them at this stage.
The wholesale CBDC schedule
Next month the ECB will publicly announce plans for the trial work and conduct a short industry survey. November’s call for interested participants will target banks and market DLT operators.
The exploratory work is planned in two waves, starting in May and July 2024, and will involve real payments but only on certain days and hours. However, before the exploratory work starts, there will be mandatory preparation testing between December 2023 and March 2024.
Unified Ledger discussions
One of the topics raised by the ECB was the Unified Ledger, where private and central bank money exists on the same network as tokenized securities and digital assets. In addition to the BIS concept of a Unified Ledger, the IMF outlined similar ideas in the X-C platform and the Regulated Liability Network (RLN) came first.
The ECB presentation states that a single network such as the Unified Ledger would be difficult to implement practically. And it might encounter challenges because many countries have specific needs. Hence, it’s more likely there will be regional or use case-specific ledgers that might evolve. The meeting minutes suggest that commercial banks share this position.
This view of an evolution supports the ECB’s emphasis on interoperability, which might evolve into standardization and integration.
Other items on the agenda included presentations from banks and institutions on DLT use cases as well as examples of payment versus payment (PvP) functionality for multicurrency (FX) transactions and cross border payments.