DLT Innovation Challenge

In collaboration with the Bank for International Settlements Innovation Hub (BISIH) London Centre, the Bank of England is engaging with the private sector to better understand the implications of incorporating distributed ledger technology (DLT) into wholesale central bank settlement. Following the challenge, there will be a showcase of aspects of this work at an event in October 2025.

The DLT Innovation Challenge is an invitation to firms to demonstrate how to securely transact and settle central bank money on an external ledger that is not controlled by the Bank.

The challenge

The Bank and BISIH want to engage with innovative firms from across the world to broaden their understanding in this area. We want to make sure those working in this space can showcase their work and expertise to the central banking community.

For central banks, it is important to understand whether they need to separate the issuance of money from technology and whether operating their own ledger is required. Focusing on technology will help us isolate what is possible in terms of technology, which will help identify key policy questions that need addressing.

The aim is to focus the challenge on the types of solutions and ledgers not operated by the central bank, but which could support central bank money. In particular, it explores environments where trust is not inherent—where participants must rely on mechanisms other than central bank control of the ledger to ensure security, finality, and integrity. This framing allows us to test how trust can be established in decentralised or externally governed infrastructures, and to draw insights that may inform the wider wholesale experimentation programme. The challenge is purely experimental and does not reflect any intended policy by the Bank or BISIH.

We are focusing the challenge on the following high-level problem statement:

Learning outcomes from the submissions could broaden our understanding of the state of DLT in supporting:

• settlement finality and security: ensuring secure, irreversible settlement of central bank money through tamper-proof transactions, controlled issuance, and protection against theft or unauthorised access.
• scalability: demonstrating how DLT handles high transaction volumes with low latency, supports efficient consensus, and scales both technically and economically with payments and liquidity efficiency.
• network and asset control: exploring how DLT governs digital assets, enforces programmable access and compliance, and balances decentralisation with regulatory requirements and reconciliation.
• interoperability: how DLT facilitates seamless communication between diverse financial systems, protocol compatibility and cross-network functionality.

We hope to identify interesting solutions to hosting central bank money on external ledgers. After the challenge, we will consider the merits of conducting a future phase targeted experiment(s) in 2026 to more thoroughly explore specific solutions. This work may also provide information for consideration for the Bank and BISIH’s broader experimentation programmes. We will also look to share the results with our central bank peers.

Why are we collaborating on this?

The ability to settle in central bank money is a core feature of the financial system and helps keep financial market infrastructures functioning efficiently. It provides a safe and liquid settlement asset for market participants and serves as the cornerstone for financial stability. As transformative technologies continue to drive innovation in financial services, it is important that central bank money is compatible with them.

If new technologies, such as DLT, become widely used in wholesale settlement, ensuring compatibility with central bank money is important to maintain trust and stability in the financial system.

The Bank has previously collaborated with the BISIH London Centre on a number of projects, most notably Project Meridian and Project Meridian FX, to explore the use of DLT in wholesale settlement through synchronisation. This involves co-ordinating the movement of central bank money between accounts in wholesale payment infrastructures, including real-time gross settlement (RTGS) systems, transferring assets or funds across one or more other, external ledgers.

How does this challenge support the Bank’s work on wholesale innovation?

In response to rapid innovation in wholesale technology, the Bank of England has launched several initiatives to adapt to this evolving landscape.

The Bank has recently renewed the Real-Time Gross Settlement (RTGS) service, which now includes Omnibus Accounts to support the settlement of tokenised assets in central bank money. Looking ahead, the Bank is working to design a synchronisation interface as part of the Future Roadmap for RTGS. This would allow RTGS to connect with external ledgers, including those based on programmable platforms, and settle assets in central bank money.

In parallel, the Financial Conduct Authority and the Bank have launched the Digital Securities Sandbox, providing a secure regulatory environment for market participants to experiment with issuing and trading digital securities.

Alongside synchronisation, another option could be to record tokenised assets and payments movements on a single ‘unified ledger’, enabled by a wholesale central bank digital currency. For this reason, we have committed to exploring the use cases, functionalities and prospective designs of both wholesale CBDC and synchronisation with a programme of experiments in wholesale payments outlined in the Bank’s 2024 discussion paper, The Bank of England’s approach to innovation in money and payments.

Process and timeline

The challenge will run for approximately a month from mid-September. Successful applicants will participate in four virtual ‘deep dives’ aligned to the learning outcomes above. The deep dive will examine how aspects of each participants’ solution address the problem statement. Following these sessions, participants will be short-listed to present at an in person showcase event on 21 October 2025. Further details of the timings and application process can be found in the Terms of Participation.

The showcase event will comprise of participant presentations or demonstrations to a panel of experts from the Bank and BISIH, an audience of industry peers, and the central banking community. Participants will be able to meet others working in this field and contribute to a growing area of central bank work. We will publish a write-up of the challenge after the event.

Apply to take part

Applications are open to all organisations across the world from technology, payments, banking, retail and other relevant sectors that are interested in exploring our problem statement and highlighting the DLT technologies that can help answer this. 

The Terms of Participation outline details of how to apply, the criteria on which we will assess applications and more detailed information about the process. To apply, please email DLTInnovationChallenge@bankofengland.co.uk with your response to the application questions in the Terms of Participation (Annex 1). We will accept applications until 23 July.

We are hosting a joint webinar on 7 July 11am to 12pm BST to answer any questions on applying to take part. Please register you interest in attending.