Germany’s central bank is creating DLT team, hiring engineers

Germany’s Bundesbank is hiring DLT developers and engineers for its “new DLT team”. The job postings include a senior engineer and developer with EVM (Ethereum-compatible) skills.

During the last few months the Eurosystem has been conducting wholesale DLT settlement trials, which ramped up over the summer. The Bundesbank’s Trigger solution supports DLT payments by connecting DLTs to the T2 real time gross settlement system. As part of the trials, Italy provided another trigger-like solution and France offers a wholesale CBDC option. While the Trigger solution uses a private blockchain, it does not tokenize money.

One driver of the Trigger solution was uncertainty about whether work on a wholesale CBDC was warranted, when the future of tokenization was uncertain. There were also concerns that DLTs can fragment money by creating pockets of cash on different platforms.

It’s unclear whether the new DLT team represents a change of heart.

A key task outlined in the engineering job posting is the “Technical development of a robust EVM-based DLT architecture: Focusing on cross-chain interoperability and working closely with internal and external stakeholders of the Deutsche Bundesbank, you will create and implement a scalable and resilient DLT architecture that can be seamlessly integrated into existing IT infrastructures.”

The developer will be responsible for “developing interdisciplinary smart contract solutions.”

Many of the recent ECB wholesale trials used the Trigger solution rather than France’s wholesale CBDC, despite market participants expressing a preference for a wholesale CBDC. One reason is the greater DLT activity within Germany driven by supportive regulations.

Not all German bankers wholeheartedly embrace the idea of the Trigger solution and really want a wholesale CBDC. Some see it as an interim solution before a wholesale CBDC. Others don’t see the point of it.

Commercial bank money tokens

In addition to the recent wholesale DLT settlement trials, there’s a second relevant initiative. The ECB has started a workshop for discussions about commercial bank money tokens (CBMT), and Germany’s banking associations and the banks are keen to build a live system. Two of the three systems recently trialled were EVM-based with a third using R3’s Corda. While CBMT doesn’t require a wholesale CBDC, it would be handy.

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