ECB's Schnabel Backs Blockchain-Based Central-Bank Money

European Central Bank (ECB) Executive Board member Isabel Schnabel is calling for central-bank money to be brought onto blockchain infrastructure. According to Bloomberg, Schnabel argues that the programmability of distributed ledgers could modernize how the ECB implements monetary policy and manages collateral and liquidity.

Schnabel's comments point toward a system in which programmable central-bank money can be settled directly alongside tokenized assets issued by regulated financial institutions. The ECB has been exploring wholesale settlement on distributed ledgers for over two years, with the Eurosystem testing blockchain-based wholesale transactions in early 2024.

The ECB plans to launch its Pontes initiative next month, which will connect distributed-ledger platforms with the bank's existing TARGET payment and settlement services. A blueprint for Appia, the longer-term effort to overhaul the region's settlement infrastructure, is expected in 2028.