The Eurosystem has launched Pontes, a solution designed to settle wholesale transactions in tokenized assets using central bank money, according to the European Central Bank (ECB).
Pontes links market platforms that use distributed ledger technology (DLT) with the Eurosystem’s TARGET payment and settlement infrastructure. The ECB said the launch marks the first step in the Eurosystem’s strategy to adapt central bank money to the development of tokenized financial markets.
“The Eurosystem is working towards a more integrated, innovative and resilient European financial market in the digital age,” ECB President Christine Lagarde said.
At the initial stage, Pontes will offer a basic set of services. Its functionality and operating window will be gradually expanded in line with market needs and technological progress. Full-scale implementation is expected by 2028.
The ECB also said it has started preparatory work to invest a small share of its own funds in tokenized securities. Settlements for those transactions are planned to be carried out in central bank money via Pontes.
In the first phase, the investments will focus on euro-denominated securities issued by central and regional authorities in euro area countries, government agencies and European supranational institutions.
The ECB said those investments will help the regulator gain practical experience in using distributed ledger technology across different stages of the investment process, including trade execution, settlement and portfolio management.
Once the preparatory work is completed, the ECB’s Executive Board will decide on the operational parameters and timing for launching the investments, taking into account developments in the tokenized securities market.
