According to the minutes published on Thursday, the European Central Bank (ECB) will initiate exploratory work based on Distributed Ledger Technology (DLT) starting in 2024 in order to achieve financial market consensus.
The European Central Bank (ECB) will commence Wholesale Central Bank Digital Currency (CBDC) Experimentation Trials in 2024
While developing plans for a retail European Central Bank digital currency (CBDC), known as the digital euro, that can be used by EU citizens, the central bank is also researching how it can innovate in resolving securities or foreign exchange transactions between financial institutions.
The document stated that the ECB has clarified that the anticipated start of the exploratory work is in 2024. The explorations will be “limited in terms of capacity and time” and will be conducted based on existing rules, including a new pilot regulation temporarily relaxing financial market infrastructure requirements for securities trading, which was adopted by the EU last year.
Last week, it was announced during the inaugural meeting of a newly established industry group by the ECB that traditional financial players continue to explore the foundations of cryptocurrencies and blockchain technology. The ECB’s advisory board is dominated by traditional financial players such as Euroclear and Deutsche Bank, but it also includes some DLT-focused initiatives like HQLAX and Fnality.
On Wednesday, newly proposed laws by the European Commission included regulations that could support a retail CBDC to protect consumer privacy and prevent escaping deposits within the banking system. These regulations also include measures such as holding limits.
Leave a comment