DLT Applications for Wholesale Payment Systems: A Focus on Central Bank Money Settlement
Explore the impact of Distributed Ledger Technology (DLT) on wholesale payment systems, specifically central bank money settlement. Highlight the benefits, challenges, and potential coexistence of DLT with existing systems like Real-Time Gross Settlement. Delve into the role of private and public money in modern monetary systems and discuss the implementation of DLT in the international monetary framework.
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Presentation Transcript
Disruptive technology in wholesale payment systems: DLTapplications for central bank money settlement a focus onthe ECB case Author: Emanuele Amandolagine Commenter: Daniel Steinberg Central Bank Annual Conference | 2025
In a nutshell 1. Objective is too discuss the benefits of DLT technology for wholesale payment systems. 2. The importance of central bank money settlement lies particularly in transactions settled through central bank money ( hard money), and the use of legacy systems such as Real-Time Gross Settlement (RTGS) platforms. 3. Payment systems are not neutral. they are essential for a thriving modern economy. However, they require certain foundations, such as a robust and reliable legal framework to support their operation and integrity. 4. Wholesale CBDC can generate more efficiency. T+0. 5. Conclusion: there are advatanges (atomic settlement and T+0 settlements), but techinical and regulatory challenges.
Comment 1 Payment systems play a crucial role not only in the implementation of monetary policy but also in the broader functioning of the economy. They ensure the efficient circulation of money, support financial stability, and enable trust in economic transactions. Real-time gross settlement. TARGET example in Europe, which is settled by Central Bank Money. Emphasizes on the benefits of DLT. Explanation via case-studies. How Real-Time Gross Settlement (e.g. TARGET) and DLT can coexist? Should they live together? DLT should replace Real-Time Gross Settlement? How? Trigger Solution
Comment 2 Payment systems rely on private and public money. Modern monetary systems depend on the mutually reinforcing roles of central bank and commercial bank money The reach of private money is relevant modern economies, including on an international perspective. The Eurodollar, which constitute short-term liabilities issued by global banks operating outside of the US is a good example. Inclusion of other forms of private money as part of this monetary framework. This is important because alongside with corresponding banks, SWIFT and other elements, they are are part of the payment system network .
Comment 3 How to implement DLT international monetary framework? Are there more challenges than the scalabilitytrilemma ? Privacy There is an amazing car, but where is the door? The idea of CBDCclusters Interoperability between CBDCs (not only DvP, also PvP) Exchange rate?
Comment 4 What are actually the benefits of CBDC? Only atomic settlement. Can other technologies do the same? Methodology: Three use cases from Europe. Perhaps one case from Europe and other case outside of Europe would be beneficial, maybe the Brazilian case. Dig deeper on your findings.
