ECB Launches Pontes for Central Bank Money Settlement in Tokenized Assets
The European Central Bank (ECB) has launched Pontes, a solution that enables wholesale transactions in tokenized assets to be settled in central bank money. This move builds on the outcome of the Eurosystem's 2024 tests using Distributed Ledger Technology (DLT) for central bank money settlement.
Pontes will initially operate as a bridge between distributed ledgers and the Target settlement service, offering a core set of services that will be expanded over time in line with market needs and technological developments. Enhanced features and longer operating hours are expected to be introduced gradually, with full implementation planned by 2028.
According to Christine Lagarde, President of the ECB, 'The Eurosystem is working to enable a more integrated, innovative and resilient European financial market in the digital age.' An initial group of market participants and DLT operators has completed onboarding and is ready to start using Pontes immediately. Additional participants are committed to connecting to Pontes in the coming months.
The ECB will also invest a small portion of its own funds in tokenized securities, focusing initially on euro-denominated euro area public sector and European supranational securities. This investment aims to provide first-hand experience with the use of blockchain technology in financial markets.