Central Bank Money

Definition ∞ Central bank money refers to liabilities of a central bank, representing the foundational form of currency in an economy. This includes physical banknotes and digital reserves held by commercial banks at the central bank. It serves as the ultimate settlement asset for interbank transactions and forms the basis for monetary policy implementation. This sovereign money contrasts with commercial bank money, which constitutes claims on private financial institutions.
Context ∞ Discussions around central bank digital currencies (CBDCs) highlight central bank money’s potential evolution into a widely accessible digital form. Such initiatives are currently being explored globally to modernize payment systems and maintain monetary sovereignty in an increasingly digital financial landscape. The implications for existing digital assets and private stablecoins are a significant point of policy debate.

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→Financial Architecture

→Asset Tokenization

→Digital Clearing

Six Major UK Banks Pilot Tokenized Sterling for Settlement and Payments

This consortium pilot digitizes core commercial bank money, enabling T+0 interbank settlement and unlocking capital efficiency across diverse financial workflows.

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→Securities Issuance

→Asset Tokenization

→BaFin Regulated Platform

Siemens Digital Bond Trades on Regulated Platform, Validating Tokenization

The successful secondary trade of the €300M digital bond validates DLT as a scalable, compliant infrastructure for capital markets, reducing settlement latency and counterparty risk.

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→DLT Interoperability

→Cross-Border Payments

→Financial System Efficiency

Eurosystem Expands DLT Initiative for Central Bank Money Wholesale Settlement

Systemic DLT adoption by the Eurosystem provides financial institutions with a compliant framework for instantaneous, risk-free wholesale settlement.

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→Operational Friction Reduction

→Programmable Finance

→Regulated Digital Finance

Bank of England Synchronizes DLT Securities Settlement with Central Bank Money

The BoE's Meridian project validates a synchronization layer for atomic T+0 settlement of tokenized assets using RTGS funds, enhancing market liquidity and systemic resilience.