ECB eyes onchain settlements next year as lawmakers weigh digital euro privacy

The European Central Bank plans to enable DLT transactions in 2026 as it prepares for the digital euro issuance and lawmakers establish rules on privacy.

The European Central Bank plans to allow blockchain-based settlement in central bank money next year and is preparing to issue a digital euro, but its privacy safeguards will ultimately depend on approval from EU lawmakers.

ECB executive board member Piero Cipollone said in a Friday statement that the institution will “make it possible to settle transactions based on [DLT] in central bank money” next year. He also said the ECB is “getting ready” to issue the digital euro and to link its system internationally for cross-border payments.

The digital euro underlying infrastructure would also be available to other institutions to settle transactions with other central bank digital currencies (CBDCs). The executive said that holding limits and a lack of interest are expected to “preserve banks’ role in “credit intermediation and monetary transmission.”

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