FRANKFURT(Realist English). On 21 September, the European Central Bank officially launched the Pontes service — the first implemented project under the Eurosystem’s strategy to “adapt central bank money to a tokenised future.” The service connects TARGET Services (the eurozone’s core settlement system) with distributed ledger technology (DLT) platforms of market participants, enabling settlement of wholesale tokenised assets in central bank money.
Deutsche Bank, Santander, and the clearing organisation Clearstream were the first to complete connection. Initially, the platform operates on business days from 8:00 to 16:00 Central European Time.
ECB President Christine Lagarde stated: “The Eurosystem is working to make European financial markets more integrated, innovative, and resilient in the digital age.”
Executive Board member Piero Cipollone added: “Pontes brings the stability and trust of central bank money into the European tokenised finance ecosystem, which will give it an important advantage for scaling.”
ECB’s Dual Action
In addition to launching Pontes, the ECB announced on the same day that it will begin investing a small portion of its own funds amounting to €23 billion in tokenised securities, with a focus on high-rated euro-denominated bonds issued by eurozone public authorities and European supranational institutions.
The ECB stated that this step is aimed at “gaining practical experience as an investor and building institutional expertise in the use of DLT in financial markets.” The investments will be settled through Pontes in central bank money. Specific details of operations and timelines will be determined by the Executive Board depending on progress in issuing tokenised assets.
Roadmap: Pontes and Appia
Pontes is the short-term track of the ECB’s “dual-track strategy.” From May to November 2024, the Eurosystem already conducted DLT settlement experiments: 64 organisations in 9 jurisdictions completed 58 use cases, settling about €1.6 billion in central bank money.
The long-term track is Project Appia, whose goal is to develop a full-fledged architecture, technical standards, and legal framework for the European tokenised asset ecosystem. The project is planned to be presented by 2028. Appia is still examining whether Europe should use a single shared ledger or multiple compatible ledgers.
Why Stablecoins Are Rejected as a Settlement Asset
ECB Executive Board member Isabel Schnabel previously stated clearly at the Jackson Hole conference that moving central bank money onto blockchain “is no longer an option.” Her key argument is that stablecoins lack the ability to independently and rapidly expand liquidity during periods of financial stress.
Schnabel cited the historical example of the 1907 banking panic: at that time, the money supply was tied to government bonds held on bank balance sheets and could not expand elastically until the Federal Reserve Act was adopted in 1913. Her conclusion: “Stablecoins are best understood as a complement to central bank money, not a replacement for it.”
Data show the urgency for Europe: the volume of dollar-pegged stablecoins is around $304 billion, while euro-pegged tokens amount to less than $1 billion. If private tokens gain a dominant position in settlement, Europe will effectively be settling in dollars.
Market Background
The 2024 experiments already proved the feasibility of DLT settlement. Since 2021, European issuers have issued almost €4 billion in DLT instruments; since March 2026, the ECB has also begun accepting DLT assets as eligible collateral for its credit operations.
The Swiss National Bank and the Bank of England are also advancing similar blockchain settlement projects.
