Piero Cipollone: From vision to delivery: building Europe’s tokenised financial market

Speech by Piero Cipollone, Member of the Executive Board of the ECB, at the Deutsche Bundesbank’s Symposium on “Future of payments: trends and innovations in Germany and Europe”[1]

Two years ago, at this very same Symposium, I argued that Europe had a unique opportunity.[2]

Tokenisation and distributed ledger technology, or DLT, were beginning to reshape financial markets. By representing and transferring assets in the form of programmable data files – tokens – they offered the prospect of making finance more efficient, enabling it to operate around the clock with greater automation and fewer intermediaries.

At the heart of this transformation lies a Copernican revolution. Tokenised assets will be at the centre of a new digital finance ecosystem that allows issuers, investors and intermediaries to think anew and innovate.

But this transformation also poses a risk: a proliferation of incompatible platforms could reproduce, or even deepen, the current fragmentation of Europe’s capital markets.

I therefore outlined a vision for building an integrated and dynamic European ecosystem for digital assets from the outset, with central bank money at its core. Since then, we have moved from vision to delivery. And today, I will discuss the next steps in turning that vision into reality.

I will first recall the objectives we set ourselves and why they remain our cardinal points. I will then explain the progress we have made, in particular through our Pontes and Appia projects. Finally, I will outline the conditions for success, namely what it will take to turn technological change into a genuine transformation of finance in Europe.

The vision: an integrated European market for digital assets

The promise of tokenisation is not simply that existing processes will become faster, but that it will enable us to simplify the architecture of finance itself.