ECB's Isabel Schnabel Urges Bringing Central Bank Money Onchain

ECB Executive Board member Isabel Schnabel is calling for central bank money to be issued and settled on blockchain infrastructure, arguing that the programmability of distributed ledgers could modernize how the central bank executes monetary policy and manages collateral and liquidity, Bloomberg reported. The comments are among the strongest signals yet from a senior euro area official that the region's monetary authority wants to settle real central bank money on blockchain-based systems. Schnabel described a future setup in which programmable central bank money could settle directly alongside tokenized assets issued by regulated financial institutions. The ECB has been studying wholesale settlement on distributed ledger technology for more than two years, an effort highlighted in early 2024 when the Eurosystem began testing blockchain-based wholesale transactions. The near-term timeline is taking shape. Bloomberg said the ECB plans to launch its Pontes initiative next month, linking distributed ledger platforms with the ECB's existing TARGET payment and settlement services, the backbone of euro area interbank payments. A blueprint for Appia, the longer-term project aimed at overhauling the region's settlement infrastructure, is expected in 2028. Schnabel said the ECB is still assessing alternative designs, including a single unified ledger or an approach that connects multiple ledgers, leaving the final architecture undecided. Her remarks also sharpen the ECB's broader debate on digital money. President Christine Lagarde warned in May that policymakers risk conflating stablecoins with the wider question of what modern financial infrastructure requires. Bloomberg did not provide a specific launch date for onchain central bank settlement beyond Pontes' planned start next month.