The European Central Bank (ECB) has launched Pontes, a new settlement system that will allow wholesale transactions in tokenised financial assets to be settled using central bank money marking a major step in the Eurosystem’s plans to integrate distributed-ledger technology into European financial markets.
Pontes is designed to provide banks and other market participants with access to risk-free central bank money when settling transactions involving assets recorded on-chain. The ECB said this was a key requirement identified during Eurosystem trials of distributed-ledger technology in 2024.
The system initially offers a core set of services with additional features and longer operating hours to be introduced gradually. Full implementation is expected by 2028.
An initial group of banks and market infrastructure operators has already completed onboarding, including Deutsche Bank, Santander, Société Générale, DZ Bank, the European Investment Bank and Clearstream. Additional participants are expected to connect in the coming months.
“The Eurosystem is working to enable a more integrated, innovative and resilient European financial market in the digital age,” said Christine Lagarde, president of the ECB.
“We will continue to make progress in close collaboration with the market.”
The ECB said tokenisation could make financial markets more efficient by combining stages such as issuance, trading, settlement, custody and asset servicing, while enabling greater automation through smart contracts.
“Pontes brings the stability and trust of central bank money to the European tokenised finance ecosystem,” ECB Executive Board member Piero Cipollone said.
“It will give an important advantage to help it scale.”
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The initiative forms part of the Eurosystem’s broader strategy to adapt central bank money to increasingly tokenised financial markets. A separate ‘Appia’ initiative is working on a blueprint for an integrated European ecosystem for distributed-ledger-based financial services, with a target of 2028.
ECB President, Christine Lagarde, said the Eurosystem was seeking to build a more integrated and resilient European financial market as digital technologies reshape financial services.
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