Securities transactions involve complex processes with multiple parties brokering between the buyers and the sellers, leading to lengthy settlement cycles and high back-office costs. Utilizing distributed ledger technology (DLT) could streamline these processes, with benefits such as reduced settlement times, reduced costs, increased transparency, and optimized liquidity. However, efficiency gains depend on representing the `cash leg' of a transaction on-chain or connecting it via existing rails. 

As blockchain gains traction in complex commercial transactions including institutional use cases, the need arises for a better understanding of the ideal form of digital money to sustain payments in DLT-based settlement systems. 
 
This report, prepared jointly with the Austrian Blockchain Center, explores three possible forms of digital money to facilitate the cash leg of securities transactions settlement  - wholesale central bank digital currencies (wCBDC), deposit tokens, and stablecoins  - and looks into ongoing research and pilots for each.