The best of both worlds. An analysis from Bybit Insights observes that central banks are now studying several innovations popularized by crypto: instant settlement, tokenized ledgers, conditional payments and interoperability. The goal is not to adopt Bitcoin or public blockchains. It consists of modernizing financial infrastructure while maintaining central bank money at the heart of the system. Institutions therefore retain the architecture, without adopting the decentralized monetary model that accompanies it.
Key Points
Central banks are retaining three crypto building blocks: atomic settlement, programmability and interoperability, via projects like AgorĂĄ and Pine
The BIS excludes stablecoins from its âunified ledgerâ and promotes tokenized deposit backed by a supervised bank
Two models oppose each other: tokenized deposit and central bank currency in Europe and Asia, private stablecoins licensed in the United States
Over 130 Jurisdictions Studying MNBC for Three Consumer Launches, Facing Over $250 Billion of Stablecoins in Circulation
Central banks are taking back crypto tools
The first project concerns the atomic regulation. Both parts of a transaction, for example the delivery of a security and its payment, are executed simultaneously or canceled together. This mechanism reduces the risk that a counterparty defaults between the two operations.
Programmability then makes it possible to automate certain payments: payment of a coupon, margin call or release of funds after a delivery. However, it is necessary to distinguish conditional payment from programmable money. In the first case, the operation is subject to agreed conditions. In the second, the issuer could limit the use of the currency depending on the location, date or product purchased.
The ECB excludes this second possibility for the digital euro, which must remain freely usable like cash. It nevertheless tests conditional payments made automatically when predefined criteria are met.
The Bank for International Settlements is mainly pushing these innovations into wholesale markets. Its AgorĂĄ project brings together seven central banks and private establishments around a platform sharing central bank reserves and tokenized commercial deposits. The Pine project, for its part, demonstrated that smart contracts could automate monetary policy operations.
Private stablecoins or tokenized bank money
The BIS imagines a âunified registerâ bringing together central bank reserves, tokenized deposits and public bonds. On the other hand, she remains critical of stablecoins, which she criticizes for not sufficiently guaranteeing the uniqueness of the currency, the elasticity of supply and the integrity of the system.
Its model favors tokenized deposits: classic bank money registered on a programmable register, but always issued by a supervised bank. This approach retains the credit protections and mechanisms of the current banking system.
Europe is moving in this direction with Pontes, which is to connect platforms using DLT technology to the Eurosystem's settlement infrastructures, and Appia, intended to build a European market for tokenized assets. Switzerland already uses a wholesale MNBC to settle real transactions on SIX Digital Exchange as part of the Helvetia project, extended until June 2028.
For the general public, the ECB is planning a pilot of the digital euro in the second half of 2027 and is aiming for a possible issuance in 2029, subject to the adoption of the European regulation.
Finally, the United States is following a different path. A January 2025 decree prohibits federal agencies from developing an MNBC, while the GENIUS Act regulates private stablecoins. Two strategies are thus emerging: modernizing banking money around central banks or entrusting innovation to regulated private issuers.
