ECB's Schnabel Calls for Central Bank Money on Blockchain Infrastructure

European Central Bank Executive Board member Isabel Schnabel has called for central bank money to be integrated onto blockchain infrastructure. This move would support tokenized asset settlement and financial modernization, according to comments made at the Jackson Hole conference.

Schnabel's remarks highlight growing attention among policymakers towards blockchain-based financial infrastructure and its potential role in supporting tokenized assets. The proposed approach would allow banks to settle tokenized assets through smart contracts, bringing payment and asset settlement processes onto the same technological infrastructure.

Tokenization allows assets represented on traditional financial systems to be issued and transferred in digital form on blockchain networks. Schnabel's comments place central bank money within this broader discussion, as it is used by financial institutions to settle obligations between banks.

The integration of central bank money with blockchain infrastructure could provide a way for banks to settle tokenized assets using digital representations of central bank funds. This would connect the transfer of a tokenized asset with the corresponding payment process, rather than requiring them to be completed through separate systems.