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European Central Bank's Blockchain Plan: Can Be Used in Payments! - Coin Bulletin
The European Central Bank (ECB) has announced its plans to step into the blockchain and develop a payment system.
The European Central Bank announced that it plans to develop a system that will execute transactions with distributed ledger technology (DLT) using fiat currency.
Expanding its work on DLT, which forms the basis of ECB, blockchain, and cryptocurrencies, it will adopt a two-tiered approach aiming to transact with fiat money.
The bank will develop an integrated system with the existing payment system Target in the first phase. The Target system enables the free flow of cash, **securities, and collateral across Europe.
In the second stage, the ECB is said to be seeking a new solution to integrate DLT-based transactions with fiat money in a more long-term and integrated manner. The aim is for this new system to also encompass foreign exchange settlement.
ECB Executive Board member and initiative leader Piero Cipollone stated on Thursday, “This step provides a significant contribution to enhancing the efficiency of European financial markets through innovation.”
ECB, has been researching digital currency technologies since 2023 and has invited financial market stakeholders to explore "conducting wholesale financial transactions recorded on distributed ledger technology platforms with central bank money".