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ECB Approves Two-Track Plan to Use Central Bank Money for DLT Transactions

2025-07-02 05:31:25

ECB Approves Two-Track Plan to Use Central Bank Money for DLT Transactions

Main Idea

The European Central Bank (ECB) has approved a two-track plan to use central bank money for distributed ledger technology (DLT) transactions, with short-term and long-term approaches aimed at integrating DLT with traditional financial systems.

Key Points

1. The ECB's short-term track, 'Pontes,' will connect DLT platforms with Eurosystem TARGET services, with a planned launch by 2026.

2. Before the Pontes pilot in Q3 2026, the ECB will consider DLT-based trial and experiment requests.

3. The long-term track, 'Appia,' aims to facilitate more DLT-based solutions and collaborate with public and private stakeholders, though the precise approach is yet to be defined.

4. The ECB aims to complete the preparatory phase of the digital euro by October 2025 and has already conducted exploratory work on DLT between May and November 2024.

5. Big transactions are held in the TARGET 2 (T2) payment system, which saw updates earlier this year.

Description

The European Central Bank (ECB) Governing Council, on Tuesday, approved a two-track plan that will utilise central bank money for distributed ledger technology (DLT) transactions. The first short-term track approach, dubbed “Pontes”, will connect DLT platforms with Eurosystem TARGET services, to be launched by 2026. The track will ensure the free flow of cash, securities and collateral across Europe. Meanwhile, before the launch of the Pontes pilot in Q3 2026, the ECB will consider DLT-based tri...

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