ECB Pushes Forward with Blockchain Plan Amid Stablecoin Concerns

The European Central Bank (ECB) is moving forward with its plan to bring central-bank money onto blockchain technology. ECB Executive Board member Isabel Schnabel emphasized that this is no longer optional, citing concerns about dollar stablecoins becoming the default cash leg and threatening European monetary sovereignty.

Schnabel's speech at Jackson Hole on August 28 was accompanied by a paper by Stanford's Darrell Duffie, which highlighted the limitations of stablecoins in expanding liquidity during crises. The ECB has been running trials with DLT settlement since 2024, involving 64 participants across nine jurisdictions and settling approximately €1.6 billion in central-bank money.

The ECB is moving ahead with Project Appia, a long-term blueprint for bringing tokenized transactions onto its blockchain platform. However, there are differing views on the architecture of this system, with some arguing for a single unified European ledger and others advocating for a network of interoperable ledgers.

Pontes, the Eurosystem's near-term bridge infrastructure, is set to pilot in September 2026. This will connect market DLT platforms directly to TARGET Services, the Eurosystem's existing payment rails, and feature a Eurosystem-operated DLT platform for settling tokenized transactions in central-bank money on blockchain rails.