The European Central Bank announced that the long-anticipated DLT settlement pilot is coming in Q3 2026 at the earliest.

The Bundesbank successfully completed its first productive trials back in 2021. At that time, it was a truly innovative solution enabling existing payment rails for the settlement of DLT transactions.

It took another four years to launch trials to include other solutions from the Banque de France and Banca d’Italia, alongside the Bundesbank trigger solution.

These trials were successful with EUR 1.59 billion in distributed ledger-based settlements with 64 participants comprising central banks, financial market participants and DLT operators. Following the conclusion, market participants hoped they would have a trigger-based solution somewhere in 2025, yet the announcement delays the launch to Q3 2026.

However, since the early start in 2021 and the expected launch at the end of 2026, markets have developed significantly and – as usual – in unforeseen ways. Stablecoins have a fair chance of becoming the default settlement layer of the internet. They now outpace Visa and Mastercard in on-chain volume and increasingly power global payments infrastructure. Stripe, PayPal, and even Visa are integrating stablecoin rails.

The future is not waiting. The real question is whether Europe is still in the room when it arrives.

Money Is a Stack, Not a Silo

The deeper truth is this: wholesale CBDC or hybrid DLT trigger solutions will be just components of a broader digital money ecosystem. If we are serious about building future-ready financial infrastructure—especially on DLT—we will need a layered system of monetary instruments: tokenized deposits, regulated stablecoins, programmable instruments, and cross-border solutions. We need to establish similar complexities to those seen in modern money markets, which feature myriad different forms of money.

Yet in Europe, financial innovation has increasingly morphed into directed financial regulation: a technocratic approach that treats innovation as a policy objective to be engineered by public institutions. The result is inertia disguised as planning and the search for the optimal solution.

But market discovery usually doesn’t work this way. It is bottom-up, incentive-driven, evolutionary and failure – prone. The optimal solution is rarely designed top down. It is foundby economic agents that make use of local knowledge and information to solve existing problems that – often are unknown to a government, central planner or regulator. Also, they usually risk private capital in finding these solutions. Last, with respect to banks – they will have to adhere to regulatory constraints.

The GENIUS Act: A Different Regulatory Philosophy

That’s why the U.S. GENIUS Act stands out. And it is not about the more general question whether stablecoins are a good thing or something bad (e.g. see the BIS publication or some recent comments from Central Bankers).

It is about the different regulatory philosophy. The GENIUS Act establishes clear minimum standards for payment stablecoins—capital, redemption rights, supervisory oversight—but refrains from prescribing design. It sets boundaries, lets the market evolve, and allows regulators to control and oversee.

This is not deregulation. Regardless of the subject matter (stablecoins), the GENIUS Act represents disciplined openness—a form of regulatory humility that recognizes the limits of foresight but appreciates human ingenuity in finding the right solutions in an environment that is consistently and predictably unpredictable. It allows competing solutions to emerge, fail, adapt, and scale. With regulators providing oversight of economic agents and markets as a whole.

The GENIUS Act does not attempt to define the future of money. It creates the conditions under which futures can be discovered and is an ordo-liberal blueprint.

A Return to Ordoliberal Principles

Ironically, this logic was once deeply European. The ordoliberal tradition, rooted in postwar German economics, held that the role of the state is to guarantee the framework, not to design the system. Markets were seen as processes of discovery, not mechanisms to be optimized from above.

The GENIUS Act revives this approach. It enables a plural monetary architecture—where stablecoins, tokenized deposits and other forms of more traditional money can coexist and compete under clear legal rules.

The Strategic Risk for Europe

The problem with the current top-down mentality in financial innovation in Europe lies quite deep. If the market – and we are already seeing some of this– starts to anticipate that innovation is futile and too costly unless it is regulator-endorsed, there will not be enough private innovation until the regulator acts.

Markets can probably absorb delay. What they cannot absorb is structural ambiguity. Priced-in latency becomes institutional inertia, and institutional inertia results in lower productivity growth – a problem well known to the European Commission. The reason however, may have something to do with the institutional designs in Europe.

By delaying wholesale DLT settlements and the risk to further falling behind with regard to stablecoins and monetary innovation as a whole, Europe risks falling behind—not just in competitiveness, but in something deeper: sovereignty over the architecture of its future financial system.

Sovereignty is not control. It is the ability to structure openness—to define the rules under which market practitioners can innovate. If the market moves around too rigid frameworks, waiting for a winner, the frameworks become irrelevant.

The ECB can still launch a DLT settlement solution in 2026. And don’t get me wrong: Like many others, I welcome the ECB’s decision. But the markets will move on regardless.

Conclusion: Innovation Without Control

The lesson from the Genius Act is simple: You don’t have to predict the future to shape it. You just need to create the space where discovery is possible.

Also, while a private company can fail and delay, the market itself should work within a framework that ensures stability, yet keeps corporations on their toes to enforce reasonable innovation, not reward laggards but let the winners grow and compete against each other for the best solutions.

Europe still has the institutional depth and legal clarity to lead in global finance. But it must rediscover its own best principles: rules over blueprints, openness over control, structure over central planning.

The European blockchain based, decentralized infrastructure doesn’t need to win. It needs to fit within a broader monetary architecture in which many instruments can thrive. Otherwise, we may find that the future of money is being built around us – because we spent too much time, thinking on how it is done in the optimal way.

Disclaimer: As the text solely reflects the author’s opinion, DekaBank does not guarantee the completeness, timeliness, or accuracy of the information and opinions expressed in the text and is not liable for any damages resulting from reliance on the completeness, timeliness, or accuracy of this information and opinions.

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