Could the Eurosystem one day be running on an Ethereum Layer 2?

It sounds like a stretch. But since Tuesday, the possibility has become a little more tangible.

Matter Labs revealed that the Bundesbank is currently testing ZKsync Prividium, its permissioned Ethereum Layer 2 designed for traditional financial institutions.

For now, details are scarce. But it’s the first time a Eurosystem central bank has been publicly named running this kind of stack in-house.

And things become more interesting once you look under the hood.

Prividium allows financial institutions to authorize participants and keep sensitive transaction data private, while being designed to remain interoperable with Ethereum.

That addresses one of the biggest questions hanging over institutional tokenization: whether permissioned systems can create a connected financial system or simply reproduce today’s silos onchain.

The Bundesbank isn’t alone on Prividium, either. CARI Network, a consortium of 30+ institutions, picked the same stack for its tokenized deposit system in March. And as of this week, Prividium’s core is open source, so any institution can run it in-house, no contract with Matter Labs required.

Smart move. The more networks banks create, the more valuable the layer connecting them becomes.

IN TODAY’S BRIEFING:

  • SIX joins the CHF stablecoin sandbox

  • BNP Paribas and ABN AMRO Join Europe’s Deposit Token Network

WITH INSIGHTS FROM

Roberto
Pagliari
Nomura

Borja
Neira
Tempo

HIGH SIGNAL NEWS

  • SIX joins the CHF stablecoin sandbox. The Swiss exchange is entering the initiative together with TWINT, Switzerland’s leading mobile payment app. Launched last April, the initiative brings together major Swiss banks, including UBS, Zürcher Kantonalbank and PostFinance, as well as issuer Swiss Stablecoin. Officially in its testing phase since June, the project aims to explore how blockchain applications could be connected to a CHF-denominated stablecoin. 🇨🇭

  • DBS and Citi complete a weekend cross-border payment using Swift’s ledger. Denominated in USD, the transaction between Singapore and the United States settled instantly, instead of taking up to two business days. Swift’s ledger coordinated the transfer between the two banks’ deposit systems. 🌐

  • Circle acquires Tazapay for $400 million. The Singapore-based cross-border payments platform will enable the market’s second-largest stablecoin issuer to expand its global banking coverage, as Tazapay has more than 60 banking and fintech partners and over 100 payout markets. A strategic move to originate and terminate payments globally while ensuring fiat convertibility. 🌍

  • Broadridge launches an end-to-end tokenization platform. Called DLX, it allows institutions to tokenize and manage bonds, equities, funds, private-market assets and money-market instruments within a single environment. The U.S. corporate-governance infrastructure giant already operates DLR, a tokenized repo platform for collateral management and securities financing that processes more than $350 billion in daily transactions. 🇺🇸

  • U.S. Bank completes a live cross-border pilot for its dollar stablecoin. The fifth-largest bank in the United States deployed USBDC on the Stellar network to execute a payment between its North American and European entities. Once commercially launched, it will be the country’s second bank to issue its own stablecoin, following SoFi last December. 🏦

TOP STORY

BNP Paribas and ABN AMRO Join Europe’s Deposit Token Network

Two major banks join: Last week, BNP Paribas joined the Commercial Bank Money Token (CBMT), an interbank tokenized deposit initiative launched by the German Banking Industry Committee (GBIC). With ABN AMRO joining only days before, the project has gained two major European banks in less than two weeks.

  • Why it matters: European banks have spent much of the past months advancing stablecoin projects, through emerging consortia such as Qivalis and Bancomat as well as individual issuers. Tokenized deposits, by comparison, have attracted less attention. That may now be changing. Networks are taking shape globally, from The Clearing House and CARI Network in the U.S. to GBTD in the UK. With BNP Paribas and ABN AMRO joining, CBMT is beginning the same transition in the eurozone: from a German project into a network with broader European ambitions.

Expansion beyond Germany: Launched in 2021 and in a sandbox phase since 2025, CBMT now counts six banks: Commerzbank, DZ BANK, Helaba and UniCredit’s German subsidiary HypoVereinsbank from the original group, plus the two newcomers. Together they are building a network in which one bank’s tokenized deposit can be used at another.

How it works: CBMT puts those bank deposits onto a ledger shared across the network. A Siemens supplier banking with ABN AMRO could pay Siemens at Commerzbank on that ledger. ABN AMRO’s tokens would move across the network and Commerzbank would issue its own tokens to Siemens in return. The deposit remains a claim on the client’s own bank, just as it is today. What changes is the infrastructure underneath it: the money now sits on a shared record that software can act on.

  • The limit: The banks themselves have not yet settled, though. Once Commerzbank issues its tokens to Siemens, it carries an exposure to ABN AMRO until the two settle in central bank money. The client payment can therefore be instant and programmable while interbank settlement remains separate. In between, banks can define how much exposure they accept, when positions are netted and when settlement is triggered.

Corporates first: That architecture makes more sense when looking at the other sandbox members: Siemens, Evonik, BASF, Bosch, Infineon and Mercedes-Benz. Industrial companies are digitizing production and treasury processes but want the payment leg to remain inside their existing banking relationships. For them, the immediate attraction is programmability.

  • “As of today, one of the clearest use cases is payment automation, including support for models such as pay-per-use. For example, each time a component is delivered to a car manufacturer, the corresponding payment could be triggered automatically. A shared token standard would also make it possible to track transactions and data throughout the entire client-to-client payment flow, significantly improving reconciliation and compliance,” a person involved in the project told Blockstories.

The Siemens–Evonik test: That promise has already been put to work. In May, Siemens and Evonik, with DZ Bank and Commerzbank, ran a pay-per-use transaction inside the CBMT sandbox. Sensor data from a water-treatment process triggered the payment as part of the process itself, rather than after an invoice was issued.

A deposit, says BaFin: The experiment also ran on relatively clear legal ground. In December, BaFin classified CBMT balances as deposits under German banking law rather than e-money tokens under MiCA. According to information obtained by Blockstories, discussions for similar treatment are under way in France and the Netherlands. But without an EU-wide definition of a deposit, expansion means repeating that regulatory work jurisdiction by jurisdiction.

Waiting for the ECB: The full benefit arrives when the second half of the payment moves onto the ledger as well. If banks could settle in tokenized central bank money in the same step as Siemens receives its tokens, the gap would close: no exposure between banks, no weekend pre-funding. How soon this future arrives is in the ECB’s hands. Pontes, live from 21 September, lets a DLT transaction trigger settlement in TARGET, a bridge to today’s system rather than money on the ledger. Appia, which would put central bank money directly on the ledger, is not expected before 2028 at the earliest.

Six banks, then fifty: Even then, CBMT faces another scaling problem. Bilateral exposure management is workable between six banks. Between fifty, it becomes much harder. The network may eventually need either a clearing layer to coordinate positions centrally, bringing CBMT closer to the regulated infrastructure its members hoped to avoid, or a more decentralized model that supervisors would have to accept.

  • “If there will be 50 banks joining, how will you do with them? That’s the question that we are facing right now,” the person close to the project said.

Roberto Pagliari is an Executive Director in Nomura’s Global Markets Digital Office. He previously spent 14 years at Commerzbank, where he focused on DLT-based cash and capital markets and helped develop the CBMT Network.

As tokenized-deposit initiatives multiply along national, regional, and banking-group lines, how will the market landscape evolve over the next few years?

I expect fragmentation to persist at the issuance level, as individual banks will continue to issue tokens representing claims on their own balance sheets. However, I do not expect an unlimited proliferation of competing clearing infrastructures.

The industry has little appetite to invest in multiple platforms, and those achieving critical mass are likely to prevail. We could therefore end up with one or two major orchestration and clearing solutions in each jurisdiction. Platforms such as CBMT or GBTD in the UK would act as bridges between bank ledgers and DLT venues, establishing common legal definitions, messaging formats, and token standards while organizing clearing and final settlement in central bank money.

These jurisdictional platforms will then need to connect. Once CBMT and GBTD have reached sufficient maturity, for example, I would fully expect them to explore interoperability. Players such as Ubyx, SWIFT, or the BIS through Project Agorá, could provide a natural orchestration layer across jurisdictions and networks.

The end state is therefore unlikely to be a single shared global ledger. It will more probably consist of multiple issuance and application-specific ledgers connected through a limited number of interoperable clearing layers.

Borja Neira works on tokenized financial products and market structure at Tempo, the payments-focused blockchain backed by Stripe and Paradigm.

What are the long-term benefits of establishing DLT networks such as CBMT for interbank payments?

It comes down to three things: 24/7 settlement, more flexible liquidity management, and multilateral connectivity.

  1. 24/7 settlement: Pay at a restaurant on a Saturday and the payment looks instant, but the money does not move until Monday. Someone carries that gap, either the bank with credit or the merchant by waiting. Tokenised deposits let a bank update the books these payments run through in real time, weekends included, without migrating its core systems.

  2. Flexible liquidity management: Banks pre-fund accounts because they cannot predict which payments will land on a given day, at home as much as abroad: the central bank account behind instant payments, the nostro account in a foreign currency, the card flows netted over a weekend. That cash earns nothing while it waits. On a shared ledger, banks watch positions build, net offsetting payments and settle only the residual, covering shortfalls intraday through repo, credit lines or collateral.

  3. Multilateral liquidity: Most small banks today route every cross-border payment through one correspondent, a larger bank that holds its accounts abroad. Today that is one relationship, so the small bank takes whatever price and service that one bank offers. In a shared network, every member can see a pending payment and step in to fund it, so the small bank has several correspondents to choose from: not one JP Morgan, but three.

Corporate doesn’t want to know, it just needs to work
Illustration: Blockstories

  1. The Multi-Issuance Issue (Ulrich Bindseil, Co-Pierre Georg, Patrick Hansen & Carolina Melches) — This paper addresses one of the hottest regulatory topics currently under debate in the EU. The authors propose replacing this model with an equivalence regime that would allow foreign stablecoins such as USDC to be distributed directly in the EU, with all reserves held in the country of the currency they reference.

  2. New Forms of Money and the U.S. Monetary Aggregates (Kristen Payne and Mary-Frances Styczynski) — A Federal Reserve analysis of how tokenized deposits, tokenized money market funds, and payment stablecoins could be incorporated into U.S. monetary aggregates. Their classification would depend on whether they primarily function as a medium of exchange or a store of value, as well as considerations around data availability, double-counting risks, and geographic scope.

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Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.

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