The Czech National Bank (CNB) has completed small trades in tokenised securities and repo operations settled on a distributed ledger (DLT) infrastructure. The test is limited, and settlement of the cash leg in central bank money on DLT was not yet available. The stated goal is to build a deep market for koruna-denominated assets, with central bank money at its core rather than stablecoins.
๐ Key takeaways
- The CNB issued its first tokenised security, settled on CSD Prague’s DLT infrastructure in October and November.
- Tests covered securities transfers, delivery versus payment, repo operations and interest payments.
- Settlement of the cash leg in central bank money on DLT was not yet available, according to a 5 November presentation.
- The CNB Lab holds a $1 million portfolio of bitcoin, a dollar stablecoin and a tokenised deposit, with no active increase planned.
A small pilot tested end to end
The CNB announced on November 10 that it had completed the operations. According to Finadium, this is the first issuance of securities in tokenised form in the central bank’s history. The issuance ran on the distributed ledger infrastructure operated by the Central Securities Depository Prague (CSD Prague), which records and settles the transactions. Ledger Insights reports that CSD Prague is the first infrastructure to receive a licence under the EU DLT Pilot Regime.
The local commercial bank ฤeskรก spoลitelna acted as counterparty. Each security had a nominal value of CZK 10,000, or about $453 according to Ledger Insights, and transaction volumes stayed in the range of a few tens of thousands of koruna. Settlement was close to instantaneous. The CSD Prague network is open only to approved financial institutions, and records are visible only to counterparties.
The CNB also made a pilot investment in a euro-denominated government bond recorded exclusively on DLT, as part of the management of its international reserves. According to the bank, tokenised markets are experimenting with different infrastructures, settlement arrangements, custody models and contractual frameworks, which helps it compare their advantages, limits and risks.
Settlement of the cash leg remains the open question
The main blind spot concerns payment. Under the depository’s general terms, the buyer funds its cash account; receipt of the money triggers the transfer of the security and the payment instruction to the seller. The seller’s credit then depends on the receiving bank, its ability to handle instant payments and the transfer timing.
| Element tested | Status according to sources |
|---|---|
| Securities transfer | Tested |
| Delivery versus payment | Tested |
| Repo collateralised by CNB bills | Tested |
| Interest payments | Tested |
| Settlement in CNB money on DLT | Not yet available at presentation date |
A presentation dated November 5 by Michal Vodrรกลพka, director of payments regulation at the CNB, clarifies the position. It was delivered five days before the announcement and was not mentioned in it. It also recalled that the CNB board had decided not to issue any retail Czech CBDC.
“settlement in CNB money on DLT was not yet available”
Michal Vodrรกลพka, Director of Payments Regulation, CNB
A market ambition for the koruna
Governor Aleลก Michl summarised the direction. The goal is a large market for koruna-denominated assets that are easier to buy and sell than German Bunds. The central bank must be involved from the outset, so that settlement rests on its own money rather than on private money such as stablecoins.
“The goal is clear: to create a large market for koruna-denominated assets that are easier to buy and sell than German bunds. The central bank must be involved from the outset, so that settlement has central bank money at its core, not private money such as stablecoins”
Aleลก Michl, Governor, CNB
On the CNB’s official page, he goes further and describes a simpler access path: “with one tap an espresso; with another an investment such as a bond or another asset that used to be the preserve of larger investors”. This route follows instant payments, which the bank has already made accessible, and would extend to tokenised Czech bonds open to smaller investors.
Caution is still warranted. A pilot of this size cannot yet establish liquidity or adoption. Finadium reports that the CNB tested the whole process: contract changes, rules and procedures, execution and settlement, technology and portfolio management. The aim is to verify the procedural, legal and technological conditions for a possible use in open market operations.
The CNB Lab digital asset portfolio
A year earlier, the CNB Lab had launched a digital asset portfolio with a total value of $1 million. It holds bitcoin, a dollar-denominated stablecoin and a tokenised deposit on a blockchain. The purchase was the first in the bank’s history outside its international reserves and was approved by the board on October 30, 2025.
The portfolio tests legal, accounting, audit, procedural, economic and security aspects, as well as custody, trading, settlement, key management, multi-level approvals, crisis scenarios and AML/CFT compliance. Its volume will not be actively increased. Because it is marginal, price swings will not affect the CNB’s financial performance, and bitcoin is not planned for the international reserves in the short term.
“The aim was to test decentralised bitcoin from the central bank’s perspective and to evaluate its potential role in diversifying our reserves… Subsequent internal discussions broadened the scope to include the future of payments and the tokenisation of assets. As a result, stablecoins and tokenised deposits were included alongside bitcoin. We will inform the public about our experience on an ongoing basis and present an overall assessment of the project in approximately two to three years”
Aleลก Michl, Governor, CNB
The CNB is now talking with counterparties and infrastructure providers about new tests, notably in stablecoins and in real-world assets (RWA). These remain subject to technical, legal, security and operational assessments. The bank is also examining self-custody, which it considers complex because of key management, access rights, operational resilience and contingency procedures.
Stablecoins: a substitution effect still conditional
According to CryptoSlate’s analysis, if eligible institutions can settle tokenised securities with central bank money, those transactions do not need to generate demand for stablecoins. However, a transfer on a shared ledger does not itself determine who supplies the payment asset. This competitive limit remains prospective: the CNB has not disclosed the exact monetary instrument used in the pilot, so the sources do not allow confirmation that settlement actually occurred in central bank money.
For comparison, the Eurosystem launched Pontes on September 21. The platform links market DLT platforms to TARGET services and enables settlement in central bank money of high-volume tokenised asset transactions. A first group of market participants and DLT operators has been onboarded, and availability is expanding in stages. In a speech on October 29, the ECB announced significantly longer hours from mid-2027, then 24/7, 365 days a year, in 2028. Pontes, however, only handles the euro, so the koruna will need its own channel.
The theoretical framework is set out in ECB Working Paper No. 3111, “Central bank money as a catalyst for fungibility: the case of stablecoins”, by Charles-Enguerrand Coste and George Pantelopoulos. The authors note that their views do not represent those of the ECB. Stablecoin issuance had reached about $250 billion at the end of June 2025, a little over 1% of dollar M2. For a stablecoin to be fully fungible with other means of payment, it needs settlement finality, interoperability and smooth convertibility into central bank money or a near-ultimate asset. Algorithmic stablecoins are not considered fungible.
A European framework under construction
The Central Bank of Ireland published Discussion Paper No. 12, “DLT & Tokenisation in Financial Services”, in March 2026. It distinguishes native and non-native tokens, as well as public or private, permissioned or permissionless DLTs. It examines efficiency, innovation, transparency and market integration, along with legal conditions, interoperability, settlement in central bank money, operational resilience, digital identity and governance. Contributions were due by June 5, 2026.
The sources disagree on what the instrument is. Finadium and Ledger Insights describe bonds, while the CNB’s official page refers to “tokenised CNB koruna bills”. No quantified market reaction has been reported. The stablecoin substitution effect remains a prospect, conditional on effective access to a central bank money settlement infrastructure.
Conclusion: promising infrastructure, settlement still to be confirmed
The Czech pilot shows that a central bank can issue and settle tokenised securities end to end, with a commercial counterparty and a licensed infrastructure. The decisive point remains settlement in central bank money on DLT, which was not available at the date of the cited presentation. Until it is, the question of stablecoin displacement stays open.
Three scenarios stand out. In the first, tokenised koruna gains liquidity and accessibility, and demand for koruna-denominated stablecoins declines. In the second, activity stays confined to approved institutions with no measurable effect on stablecoins. In the third, the expansion of Pontes and other European channels sets a central bank money settlement standard that mainly benefits the euro. The CNB’s upcoming publications, notably the overall assessment of the project expected in two to three years, should help settle the question.
Sources
- CryptoSlate, Czech central bank tests DLT bonds, boxing out stablecoins
- ECB, Working Paper No. 3111
- Finadium, Czech central bank issues first DLT bond after repo test
- Central Bank of Ireland, Discussion Paper No. 12
- Ledger Insights, Czech National Bank trials DLT bond issuance
- CNB, digital assets pilot page
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