ECB Dives into Tokenised Securities with Pontes Settlement Service

The European Central Bank (ECB) is preparing to invest part of its own funds in tokenised securities, with settlement in central bank money through its new Pontes service. This move places the ECB in a small group of central banks that have shifted from building settlement infrastructure to holding tokenised instruments themselves.

The initial purchases will focus on euro-denominated debt issued by euro-area governments, public agencies, and European supranational institutions. The money comes from the ECB's own-funds portfolio, a non-monetary-policy pot whose income helps cover operating expenses unrelated to supervisory duties.

The ECB said that by investing directly it will gain first-hand experience across the full investment lifecycle, including trade execution, settlement, systems, and portfolio management activities. This move is part of its exploratory work on distributed ledger settlement, which has been running for years.