The European Central Bank (ECB) is launching a groundbreaking blockchain-based payment system designed to enhance transactions with central bank money, as reported by Bloomberg News. ECB board member Piero Cipollone highlights the initiative’s goal of improving financial market efficiency through innovative strategies. The project will be executed in two phases, starting with the integration of a blockchain platform with the Target settlement system, followed by a comprehensive solution for foreign exchange transactions. While details on the timeline remain unclear, this initiative could lead to the development of a wholesale central bank digital currency (CBDC). Additionally, Switzerland is piloting a wholesale CBDC focused on digital bonds, set to run until 2026 for evaluation. Cipollone emphasizes the urgency of a digital euro to counteract the influence of dollar-backed stablecoins, proposing limits on holdings and ensuring it remains non-interest-bearing. The prototype phase is expected to begin this year.
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