Pythagore: Digitalising the NEU CP market through DLT

Banque de France, with the support of Euroclear and a consortium of participants, is pioneering the digitalisation of Negotiable European Commercial Paper (NEU CP) market through Distributed Ledger Technology (DLT) – a bold step toward transforming short-term debt markets.

As the largest short-term debt market in the euro area, the NEU CP market boasts €310 billion outstanding, offering issuers competitive financing conditions, deep liquidity and low documentation costs. The initiative, Pythagore, is set to make the market future ready streamlining short-term liquidity management while reinforcing transparency and security.

We are working closely with a wide range of both French market participants and stakeholders from other financial markets across the globe, and through co‑creation we embed transparency, resilience and usability from day one.

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Why it matters

Today’s NEU CP processes remain fragmented, manual in places and dependent on legacy workflows that create friction for all participants. These inefficiencies add cost, operational risk and reduce the ability of institutions to respond quickly to liquidity needs.

By introducing blockchain-based digitalisation, Pythagore tackles those challenges headon. A fully digital, interoperable solution that streamlines issuance, accelerates settlement and reduces reconciliation work across the ecosystem. Market participants benefit from greater transparency, realtime status visibility and significant operational and administrative efficiencies, enabling faster decisionmaking and improved liquidity management.

This unique public‑private partnership, unprecedented in scale, demonstrates how Europe can lead in digital innovation, delivering a blueprint for the evolution of capital markets in support of the Savings and Investments Union's objectives.

Pythagore is set to create a future-ready, simpler and more efficient way for participants to issue, trade, settle and manage NEU CP, while strengthening transparency and operational resilience across the entire market.

What’s next

The pilot phase kicks off at the end of 2026, aligning with the Eurosystem’s Pontes project and the rollout of an interconnected wholesale Central Bank Digital Currency (CBDC) with TARGET services. Euroclear’s DLT-based platform will be designed with interoperability at its core – connecting financial infrastructures like never before.

This milestone builds on a strong track record of innovation, including the issuance of France’s first digitally native note in November 2024, a joint achievement by Euroclear and Banque de France.

"Digitalising NEU CP through blockchain is a strategic step toward building a more modern, efficient, resilient and interconnected market infrastructure. By enhancing transparency and operational efficiency, this initiative will reinforce France’s position as a leading hub for short-term financing and make its market even more attractive to issuers and investors."

Isabelle Delorme, Head of Product Strategy and Innovation, Euroclear group

"What makes Pythagore distinctive is its collective design. By co‑creating with issuers, agents, dealers, investors and Banque de France, we ensure that digital innovation delivers tangible benefits from day one and can be adopted confidently at scale by the entire market."

Manoëlle Lefèvre, Chief Business Officer, Euroclear Belgium, Euroclear France and Euroclear Nederland

Key value proposition

Modernisation of the French NEU CP market: launching a ready-for-24/7 digital NEU CP issuance and settlement service, leveraging DLT and CBDC
End-to-end digitalisation: covering the entire NEU CP life cycle, aiming for a scalable, simple and real-market ecosystem use case.
Interoperability: ensuring seamless connectivity with European Central Bank’s Eurosystem PONTES platform (wCBDC), new DLT infrastructure and Euroclear legacy systems.
Market readiness and progressive adoption: focusing on operational stability and gradual migration, with a pilot phase before full-scale deployment.

Key features

Full life cycle coverage: digital issuance, settlement and servicing of NEU CP instruments.
Interoperability: with both CBDC (Pontes) and Euroclear legacy systems.
Multi-asset, multi-CSD platform: designed to support NEU MTN with future extensibility.
Settlement in CBDC: NEU CP will settle in central bank digital currency.
Regulatory alignment: operates with a clear legal and compliance framework.
Ecosystem engagement: involvement of a broad range of market participants (issuers, dealers, custodians, investors).
Operational resilience: ready for 24/7 service , robust IT and business continuity as well as compliance with regulatory requirements.
Progressive onboarding: initial pilot with selected participants, expanding to broader market over time.

Participants

Banque de France: overseeing the NEU CP market.
Euroclear: project lead, platform operator and provider of legacy system interoperability.
Market group: responsible for providing feedback, defining scenarios and business requirements. The group also oversees legal and compliance input to ensure regulatory alignment and filings, as well as IT and operational support for platform development, integration and operational readiness. It is composed of key market representatives, including:

               - issuers: corporates and financial institutions issuing NEU CPs, representing 50% of the issuance volume
                 - issuing & paying agents: managing issuance operations, overseeing life cycle payments and coordinating regulatory requirements
             - dealers: facilitating issuance and distribution to investors
            - custodians: safekeeping and settlement of digital assets
               - investors: buying and holding digital NEU CPs