ChainThink reports that on August 29, European Central Bank Executive Board member Isabel Schnabel delivered a speech titled "Central Banks On-Chain" at the Jackson Hole Symposium, advocating that central banks should native issue tokenized reserves on distributed ledgers for monetary policy, collateral management, and liquidity provision.
Schnabel noted that tokenization enables atomic settlement and programmability, helping to reduce settlement risk in scenarios such as cross-border repurchase agreements and integrating the fragmented financial infrastructure of the eurozone.
She emphasized that stablecoins lack flexible liquidity provision and cannot replace central bank reserves as the ultimate settlement asset, especially during periods of stress; they are better viewed as regulated supplementary payment instruments.
If tokenized bank deposits can be settled on central bank money, be programmable, and interoperable with tokenized assets, they can deliver the core functionalities sought by stablecoins.
The European Central Bank is advancing Project Appia and the upcoming Project Pontes to explore synchronizing TARGET services with DLT platforms, ultimately enabling native tokenization of central bank money and 24/7 operation.