An ECB Executive Board member argues that tokenised markets need central-bank money as a safe settlement asset.
European Central Bank Executive Board member Isabel Schnabel argued that central-bank money should remain the foundation of tokenised wholesale finance and may need to operate directly on distributed ledgers. Speaking at the Jackson Hole Economic Policy Symposium, she said tokenisation could help integrate euro-area markets through common infrastructure for assets and settlement. Schnabel also questioned whether stablecoins can provide an equivalent safe settlement asset, concluding that central banks have a unique capacity to supply liquidity elastically. She said bringing reserves on-chain could preserve settlement confidence while using programmable technology to modernise monetary-policy implementation.
AI-generated analysis based on the reported information above.
An on-chain form of central-bank money could reduce the need for private settlement substitutes and make tokenised wholesale markets more compatible with existing financial safeguards. It may also intensify competition among stablecoins, tokenised deposits and public settlement solutions. The benefits, however, will depend on interoperability, governance and operational resilience rather than programmability alone. Banks and market infrastructures should watch how the ECB connects new ledger-based systems to current payment rails and what access conditions it sets for private platforms.
