Eurosystem launches Pontes for central bank money settlement in tokenised finance

The Eurosystem has launched Pontes, a solution that enables wholesale transactions in tokenised assets to be settled in central bank money. This initiative is the first step in implementing the Eurosystem’s strategy for tokenised finance.

Pontes aims to support the development of the rapidly evolving financial ecosystem by providing a secure and stable settlement platform for digital assets. The project builds on the Eurosystem’s 2024 tests using distributed ledger technology (DLT) for central bank money settlement.

Tokenisation involves issuing assets as digital tokens recorded on DLT networks, which can make transactions faster and more efficient by automating multiple steps of an asset’s lifecycle, including issuance, trading, settlement, custody, and servicing.

Initially, Pontes will offer a core set of services, with plans to expand features and operating hours gradually, aiming for full implementation by 2028. The initiative involves an initial group of market participants and DLT operators, with additional participants expected to connect in the coming months.

Christine Lagarde, President of the ECB, stated that the Eurosystem aims to enable a more integrated, innovative, and resilient European financial market in the digital age. Piero Cipollone, ECB Executive Board member, highlighted that Pontes provides the stability and trust of central bank money to support the growth of tokenised finance.

The development of this ecosystem continues under the Appia project, involving experimentation and collaboration with stakeholders, with a blueprint expected by 2028. More information is available on the ECB website.