European Central Bank sets out September launch of Pontes tokenised central bank money settlement for DLT-based transactions

In a speech, European Central Bank Executive Board member Piero Cipollone set out the Eurosystem’s approach to tokenisation, arguing that DLT-based finance needs tokenised central bank money and collateral eligibility for tokenised assets to scale safely. He said the Eurosystem will offer tokenised central bank money settlement for DLT-based transactions from September through its Pontes project, presenting this as necessary to provide a risk-free settlement asset and preserve monetary policy transmission, financial stability and monetary sovereignty as tokenised markets grow. Cipollone said the Eurosystem has, since the end of March, accepted marketable assets issued in central securities depositories using DLT as eligible collateral for credit operations and is exploring whether to extend eligibility to DLT-issued assets that are not represented in eligible securities settlement systems. He also pointed to the Appia roadmap published in March as the ECB’s work on architecture and standards for an integrated tokenised ecosystem, warning that without common standards and central bank money at the core, markets could fragment across non-interoperable networks and rely too heavily on private settlement assets such as stablecoins, with implications for bank funding, run risk and foreign currency substitution.