ECB Invests in Tokenized Securities with Own Funds via Pontes System

The European Central Bank (ECB) has announced plans to invest in tokenized securities using its own funds. The move comes as the ECB's Pontes system, which enables wholesale transactions in tokenized assets to be settled in central bank money, goes live in 2026.

Pontes connects market platforms built on distributed ledger technology (DLT) to TARGET Services, the Eurosystem's existing infrastructure for settling payments and securities transactions in euros. This allows a tokenized asset traded on a DLT platform to be paid for in central bank money rather than commercial bank deposits or privately issued tokens.

The ECB will focus on euro-denominated securities issued by euro area central governments, regional governments, agencies, and European supranational institutions. The investments will come from the ECB's non-monetary policy portfolio, which generates income to help fund its operating expenses.