Eurosystem brings central bank money to tokenised finance

The Eurosystem today launched Pontes, a solution that enables wholesale transactions in tokenised assets to be settled in central bank money. Pontes is the first initiative under the Eurosystem’s strategic programme to make central bank money fit for a tokenised future and to support the development of this rapidly evolving financial ecosystem.

“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.”

Tokenisation is the process of issuing or representing assets in the form of digital “tokens”, typically recorded on distributed ledger technology (DLT) networks. For wholesale financial markets, this technology has the potential to make transactions faster and more efficient by bundling multiple steps of an asset’s lifecycle – from issuance and trading to settlement, custody and servicing – and by enabling automation and the development of innovative solutions through smart contracts.

Pontes builds on the outcome of the Eurosystem’s 2024 tests using DLT for central bank money settlement, during which stakeholders from the public and private sectors indicated that access to a risk-free settlement asset was crucial for the wider adoption of this new technology. Pontes will initially offer a core set of services, to be expanded over time in line with market needs and technological developments. Enhanced features and longer operating hours will be introduced gradually, with full implementation expected by 2028.