ECB wants to put central bank funds on the blockchain

ECB board member Isabel Schnabel is advocating for bringing central bank funds onto blockchain infrastructure. In her view, the programmability of distributed ledgers offers opportunities to modernise the execution of monetary policy, collateral management and the provision of liquidity. The ECB will launch a first concrete initiative next month and is working on a further long-term strategy.

In brief:

• ECB board member Schnabel wants central bank money on blockchain infrastructure
• The ECB will launch the Pontes initiative in September, connecting DLT platforms with existing payment services
• A detailed plan for the long-term Appia initiative is expected in 2028

Schnabel sees opportunities in programmable ledgers

Isabel Schnabel, a member of the European Central Bank’s Executive Board, is openly advocating the use of blockchain infrastructure within the central banking system. According to Bloomberg, Schnabel says distributed ledgers offer the possibility of thoroughly renewing core processes such as monetary policy implementation, collateral management and liquidity provision.

The call fits into a broader debate about how central banks can align with the rise of tokenisation and decentralised financial infrastructure without jeopardising the stability of the existing system.

Pontes in September, Appia blueprint in 2028

The ECB is already translating the plans into concrete steps in part. Next month, the bank will launch the Pontes initiative, which is intended to connect DLT platforms with the ECB’s existing TARGET payment services. This will create a bridge between new distributed infrastructure and the current payments system.

For the longer term, the ECB is working on the Appia initiative. A detailed plan for this is expected in 2028. Schnabel indicates that the ECB is currently studying several models, including a so-called unified ledger or an approach in which multiple separate ledgers are linked to one another.

Model not yet determined

It is therefore not yet decided which model will ultimately be preferred. The fact that the ECB is keeping several variants open suggests that the technical and policy questions surrounding central bank money on blockchain have not yet been resolved. The choice between an integrated ledger or a network of linked systems has major implications for how banks, market participants and governments will be able to work with central bank money in the future.

Schnabel’s announcement shows that the ECB does not intend to leave the development of blockchain infrastructure to the market, but wants to play a central role in it itself.