Danmarks Nationalbank
Danmarks Nationalbank
06/17/2025 | Press release | Distributed by Public on 06/17/2025 22:34
New technology and settlement in central bank money between banks
Analysis
Digitalisation
17 June 2025 No. 14
Analyses focus on current issues of particular relevance to Danmarks Nationalbank's objectives. The analyses may also contain Danmarks Nationalbank's recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
New technology and settlement in central bank money between banks
Distributed ledger technology, DLT, is gaining traction among global financial institutions and has the potential to evolve the way financial assets are traded. Central banks are investigating the area to ensure that financial entities can continue to use central bank money as a means of settlement for DLT-based transactions. This analysis explains the importance of central bank money, the potential use of DLT in the financial system, and the work of central banks to ensure settlement in central bank money in connection with systemic financial transactions based on DLT.
Key messages
Why is it important?
One of Danmarks Nationalbank's most important tasks is to ensure the safe and efficient execution of payments so that the public, businesses and financial institutions can trade with each other. In this context, financial institutions' access to central bank money, i.e. (typically commercial banks') deposits at the central bank, is essential to ensure a stable financial sector in Denmark. Central bank money in the interbank market is the safest and most liquid asset in the economy and is used by banks and others to settle transactions. The use of central bank money creates the basis for financial stability and an effective monetary policy. It is therefore particularly relevant for Danmarks Nationalbank to consider new technological solutions to ensure that financial institutions can continue to use central bank money to settle systemic financial transactions, even when these are implemented with new technology.
Danmarks Nationalbank's approach to the Danish payments infrastructure is technology-neutral. Therefore, the bank continuously monitors digital developments to ensure that the payments infrastructure continues to benefit from the new opportunities brought about by the digitalisation of society.
Main chart
The role of central bank money in the financial system
Source:
Danmarks Nationalbank
Danmarks Nationalbank published this content on June 17, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 18, 2025 at 04:34 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at support@pubt.io