The European Central Bank (ECB) is set to begin exploratory work on using distributed ledger technology (DLT) to settle wholesale transactions in central bank money.

Distributed ledger technology (DLT) is a type of decentralised record-keeping technology, which includes blockchain infrastructure, though not every distributed ledger is a blockchain.

The new project represents a collaboration between private sector financial firms and European central banks including Banque centrale du Luxembourg, Banque de France, Banca d'Italia, Deutsche Bundesbank and Oesterreichische Nationalbank.

The use cases to be explored include applications within the securities settlement cycle, such as delivery-versus-payment, as well as secondary market transactions and lifecycle management of securities.

Other use cases under consideration relate to cross-border payments, including payment-versus-payment.

The list of participants for the first wave has already been finalised. However the call for expression of interest to join a second wave of trials and experiments between July and November 2024 will remain open until 30 April 2024.

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