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Commercial Bank Money Token Proof of Concept Report New Forms of Money in an Era of Evolving Industrial Needs
17 July 2024 Addressing German industry needs in tokenised commercial bank money The commercial bank money token, CBMT, represents a pioneering step towards a more digitalised financial system, achieved by placing commercial bank money onto distributed ledger technology, DLT. CBMT facilitates the seamless execution of money flows and business processes within the same systems, harnessing the flexibility and efficiency of DLT while retaining the trust and reliability associated with traditional banking. A project group consisting of banks and industrial firms explored how DLT could be used to enable the convergence of new business processes within Industry 4.0 with efficient and safe financial settlement. Although further examination is required, the results of the initial tests were positive. This is a step forward, showing clearly that the technology and respective use cases can also work in a real-life business environment. Additionally, results might also be used by the Eurosystem in its deliberations on issuing the digital euro in the form of a token. The Federation of German Industries and the German Banking Industry Committee are monitoring the digitalisation of the financial system closely. We strongly support the group of banks and industrial firms in their efforts to create a technical solution which works for both sides. The CMBT has the potential to contribute significantly to a multi-solution-environment, together with other instruments such as a tokenised central bank currency.