The European Central Bank (ECB) said it is looking to develop a way to run Distributed-Ledger Technology (DLT) transactions with Fiat currency as it expands its work with the key feature that supports blockchain and cryptocurrencies.

The bank is planning a two-step approach to the use of the technology, which is a decentralized database maintained and updated independently of individual participants in a large network. First, it will develop a system associated with its existing target settlement system. Goals ensure “the free flow of cash, securities and security throughout Europe,” it said.

“This is an important contribution to improving European efficiency in the economic market through innovation,” said Executive Board member Piero Cipollone, who oversees the initiative, in a statement on Thursday.

The bank will also look for a long-term, more integrated way of running DLT-based transitions in Fiat Money, which will include currency exchange.

The ECB has been investigating digital currency technology since 2023.

A timeline on the bank’s plans will be published later.