The European Central Bank (ECB) has launched Pontes, a new service designed to allow wholesale transactions in tokenised assets to be settled using central bank money.
The initiative marks the first step in the Eurosystem’s strategy to adapt central bank money to financial markets with distributed ledger technology (DLT). The ECB said Pontes will initially provide a core set of services, with additional features and longer operating hours to be introduced gradually. Full implementation is expected by 2028.
Tokenisation involves representing financial assets as digital tokens recorded on blockchain or other DLT networks. The technology is being explored across financial markets because it can combine several stages of an asset’s lifecycle, including issuance, trading, settlement, custody and servicing.
For banks and other financial institutions, one of the questions around tokenised markets has been how transactions can be settled using a trusted form of money. Pontes is intended to address that issue by providing access to central bank money for transactions involving tokenised assets.
The ECB said its 2024 experiments with DLT-based settlement showed that market participants viewed access to a risk-free settlement asset as important for wider adoption of tokenised finance. Pontes builds on those tests by moving the concept into an operational service.
An initial group of banks, public institutions and market infrastructure providers has already completed onboarding. The participants include Deutsche Bank, Santander, Société Générale, the European Investment Bank and Deutsche Bundesbank. DLT operators including Clearstream, Axiology, Cashlink and SWIAT are also among the organisations connected to the initiative. Additional participants are expected to join in the coming months.
The ECB expects Pontes to develop alongside the wider tokenised finance market. Its initial service will be expanded as market requirements and technology evolve, while operating hours will also increase over time.
The initiative forms part of a broader Eurosystem programme focused on integrating DLT-based financial services with existing central bank infrastructure. A separate project, known as Appia, involves the Eurosystem, Danmarks Nationalbank and private-sector participants and is working toward a blueprint for an integrated DLT financial ecosystem by 2028.
ECB President Christine Lagarde said the Eurosystem is seeking to support a more integrated and resilient European financial market as finance becomes increasingly digital. The central bank plans to continue developing Pontes in cooperation with market participants as tokenised finance expands.
