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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→Institutional Liquidity

→Securities Registrar

→Digital Bond

Siemens Issues €300 Million Digital Bond on Private DLT Platform

Tokenizing corporate debt on a permissioned ledger enables minutes-long settlement with central bank money, dramatically reducing counterparty risk and optimizing treasury capital efficiency.

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→Central Bank Money

→Wholesale Settlement

→DLT Adoption

MAS, DBS, OCBC, UOB Successfully Settle Interbank Loans with Wholesale CBDC

The wholesale CBDC test network establishes a common settlement asset for atomic, programmable interbank transactions, significantly reducing counterparty and liquidity risk.

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→Regulated Payment System

→Institutional Settlement

→Sterling Payment System

BNP Paribas and Lloyds Settle On-Chain Interest Rate Swap on Regulated DLT

The DLT-based wholesale payment system enables atomic settlement of complex derivatives, drastically reducing counterparty risk and freeing trapped capital.

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→Regulated Trading Venue

→Wholesale Digital Assets

→Treasury Management

Siemens Issues €300 Million Tokenized Bond, Enabling Secondary Market Trading

Tokenizing core treasury issuance on DLT streamlines capital formation, reducing settlement risk and unlocking crucial secondary market liquidity for corporate debt.

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→Central Bank Money

→Corporate Treasury

→On-Balance Sheet

HSBC Expands Tokenized Deposits to US and UAE for Corporate Treasury

The DLT-based Tokenized Deposit Service enables institutional clients to achieve T+0, 24/7 cross-border settlement, optimizing global liquidity management and capital efficiency.

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→Liquidity Management

→Peer-To-Peer Transaction

→Financial Instrument Settlement

BNP Paribas and Lloyds Settle First On-Chain Interest Rate Swap

Leveraging DLT, the banks achieved atomic settlement of a complex financial derivative, radically reducing counterparty risk and optimizing capital efficiency in wholesale markets.

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→Interoperability Framework

→Digital Asset Ecosystem

→Securities Market Infrastructure

European Central Bank Unveils Dual-Track Strategy for DLT Settlement Infrastructure

ECB's DLT framework integrates TARGET Services for central bank money settlement, future-proofing Eurozone capital market infrastructure.

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→Eurosystem

→Post-Trade

→Distributed Ledger Technology

European Central Bank Commits to DLT Settlement Using Central Bank Money

This strategic dual-track approach integrates DLT platforms with TARGET Services, fundamentally optimizing the euro-denominated settlement layer for tokenized assets and reducing systemic counterparty risk.

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→Wholesale Settlement

→Liquidity Management

→Institutional Finance

ECB Approves DLT Settlement Using Central Bank Money for Eurozone Finance

The Eurosystem's DLT settlement plan establishes a compliant, systemic rail for tokenized assets, reducing counterparty risk and friction in wholesale finance.

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→Digital Market Infrastructure

→Cross-Border Transactions

→Regulated Finance

Major Financial Institutions Complete Tokenized Asset Settlement Trial on Shared Ledger

The Regulated Settlement Network validates DLT's capacity to deliver 24/7, frictionless DvP for tokenized assets, reducing counterparty risk and cost.