The article discusses the rationale for the Eurosystem exploring central bank money settlement of transactions registered on DLT platforms, the results of its analysis so far and the envisaged next steps.

The trials and experiments will be conducted with three Eurosystem solutions enabling wholesale financial transactions recorded on distributed ledger technology platforms to be settled in central bank money in the T2 real-time gross settlement system operated by the Eurosystem.

The paper provides a structured overview of the literature on the economics of CBDC. It documents the economic forces that shape the rise of digital money and review motives for the issuance of CBDC.

The paper then examines the implications for the financial system and discusses of a number of policy issues and challenges.

The paper describes current visions how to eventually find this holy grail within the next decade, namely through (i) modernised correspondent banking; (ii) emerging cross-border FinTech solutions; (iii) Bitcoin; (iv) global stablecoins; (v) interlinked instant payment systems with FX conversion layer; (vi) interlinked CBDC with FX conversion layer.