ECB Official Pledges Central Bank Money on Blockchain

Isabel Schnabel, an official at the European Central Bank (ECB), has made a significant statement on central bank money and its relationship to blockchain technology. In a recent pitch, Schnabel emphasized that stablecoins lack the capacity to expand liquidity rapidly during periods of financial stress, a gap that only a central bank can fill.

Schnabel's solution involves tokenization, which she believes can make financial transactions faster, safer, and more programmable. However, this requires that the safest asset in the system, central bank money, lives on the same rails as everything else being tokenized.

The ECB is working towards this goal through Project Pontes, a scheme to launch in September that will synchronize the ECB's existing TARGET Services with DLT platforms run by market participants. The long-term vision, outlined in Project Appia, is to create a single digital financial market alongside the euro itself.