The European Central Bank should integrate blockchain technology to maintain its influence over monetary policy and counter the rise of private digital currencies, ECB board member Isabel Schnabel said at the Jackson Hole Economic Policy Symposium on Friday.
Schnabel argued that central banks must "go on-chain" to preserve the primacy of central bank money in a rapidly digitizing financial system. This would involve embedding monetary policy operations into distributed ledger networks, enabling faster and more targeted liquidity provision during market stress. "To reap the full benefits, central banks need to go on-chain too," she stated. "That means bringing central bank money into the tokenised environment and modernising the tools of policy implementation."
Programmable transactions on blockchain networks could allow central banks to apply differentiated interest rates or automate collateral requirements, according to research cited by Schnabel. Such capabilities would enhance the ECB’s ability to respond to financial shocks while reducing reliance on private alternatives like stablecoins.
Two ECB initiatives are advancing this agenda. The Pontes project links existing distributed-ledger platforms to traditional payment infrastructure, while the Appia project explores the long-term architecture, standards, and legal framework required for a European market in tokenized assets. Schnabel highlighted South Korea’s Project Hangang as a potential model, which consolidates central bank money, private money, and financial assets onto a single ledger.
The proposals reflect a broader shift among central banks toward exploring blockchain’s role in modernizing monetary policy tools. Schnabel’s remarks underscore the ECB’s intent to balance innovation with the preservation of its core functions in an evolving financial landscape.
