ECB's Tokenized Euro Project Set to Launch in September

The European Central Bank (ECB) is launching a tokenized euro project called Pontes in September, which will link market ledgers with TARGET Services for atomic settlement in central-bank money. This initiative aims to provide a publicly controlled settlement anchor and give regulated blockchain markets a direct central bank settlement asset.

According to Isabel Schnabel, an Executive Board member of the ECB, stablecoin issuers cannot create liquidity during stress, which weakens their case as the final wholesale settlement anchor. She argued that only a central bank can expand reserves immediately and preserve settlement at par.

The tokenized euro will not serve as retail money initially, but rather as a wholesale asset for institutional markets. It will provide programmable deposits and enable the ECB to inject liquidity, change collateral rules, or adjust rates within the same environment.

Pontes will launch in T2, with later upgrades adding smart contracts, continuous operations, and finality on the Eurosystem platform. The project's architecture will be decided by 2028, with options including a shared ledger, a central-bank ledger linked to private networks, or several interoperable ledgers.