In a speech, European Central Bank Executive Board member Isabel Schnabel argued that central banks should issue reserves as native programmable assets on distributed ledgers to support tokenised wholesale finance. Stablecoins may complement central bank money but cannot replace it as the ultimate settlement asset because issuers cannot supply liquidity elastically during periods of stress. On-chain reserves would also allow central banks to use smart contracts for monetary policy operations, collateral management and liquidity provision. Schnabel provided an update on the Eurosystem’s Pontes project, which is scheduled to launch in September 2026. Pontes will combine a mechanism linking TARGET Services with market distributed ledger technology platforms and a Eurosystem-operated platform for settling distributed ledger transactions in central bank money. Cash-leg settlement finality will initially remain anchored in TARGET2 before moving to the Eurosystem platform, with smart contracts and 24/7 operations planned after launch. Project Appia is examining whether tokenised reserves and assets should operate on a unified ledger, a central bank ledger connected to private networks or multiple interconnected ledgers. A unified system could improve atomic settlement and reduce fragmentation, while interconnected platforms may better support resilience, competition and governance, provided liquidity can move seamlessly between traditional and tokenised environments.

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