The Eurosystem has successfully completed the first trials of a new technology for settling wholesale transactions in central bank money.
This initiative, led by Oesterreichische Nationalbank, aims to explore the interaction between TARGET services and distributed ledger technology (DLT) platforms, which has the potential to revolutionize wholesale financial markets.
Initially, 16 private companies were asked to participate in trials involving real payments in central bank money and experiments with simulated payments in a test environment. This experimental phase, scheduled to last over the next six months, is expected to provide the Eurosystem with valuable insights into the feasibility and benefits of incorporating new technologies into wholesale financial markets.
The main focus of the initial experiments conducted by the Osterreichsche Nationalbank was on the tokenization of government bonds in secondary market transactions against central bank money and on simulated delivery-versus-payment (DvP) settlements. This milestone marks a significant step forward in his exploration of DLT's potential in enhancing payment processes.
Future trials and experiments are in preparation and include a variety of use cases such as DvP trading in primary and secondary markets, securities lifecycle management, automated wholesale payments, and clearing-to-clearing transactions. Key performance indicators will be used to evaluate results, and evaluations will be carried out in collaboration with participating companies.
This initiative underlines the Eurosystem's commitment to fostering innovation in wholesale finance and its proactive stance in exploring the integration of DLT into central banks' payment processes. As trials progress, we could see major changes in the financial landscape, paving the way for greater efficiency and security in wholesale transactions.
“The successful completion of today’s experiment marks an important milestone in the exploration of new technologies for wholesale financial market operations. It underlines our commitment to improving the quality of our products,” said the Eurosystem representative.
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