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The European Central Bank (ECB) Governing Council has approved research efforts that will use central bank money to settle distributed ledger technology (DLT) transactions, as the body looks to make its payment systems more efficient.
One short term approach is called "Pontes" which will link DLT platforms with Eurosystem TARGET services that ensure the flow of cash and securities across Europe. A pilot will be launched by the third quarter of 2026. A more long term solution called "Appia" will facilitate global operations and analyze DLT-based solutions, the post said on Tuesday.
"The decision is in line with the Eurosystem’s commitment to supporting innovation without compromising on safety and efficiency in financial market infrastructures," the release said.
The ECB has been exploring how to utilize DLT technology to boost payments settlement, something which central banks across the world have been looking at. It conducted exploratory work on wholesale central bank money settlement between May and November 2024. A report on the results of this work was also published on Tuesday that identified DLT having benefits such as reducing costs and countering credit and settlement risks.
Read more: ECB Targets October to Finish Digital Euro Preparation Phase
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