Central Bank DLT

Definition ∞ Central Bank DLT refers to the use of distributed ledger technology by a nation’s central bank. This application involves central banks exploring or implementing blockchain-like systems for various functions, including the issuance of central bank digital currencies (CBDCs) or the settlement of wholesale financial transactions. Such initiatives aim to enhance the efficiency, security, and resilience of national payment infrastructures. The technology offers potential improvements in speed and transparency compared to traditional financial systems.
Context ∞ The deployment of Central Bank DLT is a significant discussion point in global financial news, often weighing the benefits of faster, cheaper transactions against concerns regarding privacy, monetary policy control, and financial stability. Many central banks are conducting pilot programs and research into wholesale and retail CBDCs, assessing their operational viability and policy implications. The future trajectory involves continued experimentation and international cooperation to establish interoperable standards for these digital financial systems.