ECB Launches 'Pontes' to Bridge Blockchain and Traditional Markets

The European Central Bank (ECB) has launched 'Pontes', a platform that enables wholesale transactions in tokenized assets to settle in central bank money. This move is aimed at bridging the gap between traditional financial markets and blockchain technology.

Pontes allows banks and other institutions to settle tokenized trades, such as stocks and bonds, in reserves held at the ECB itself. This reduces the risk of credit default associated with commercial bank money or stablecoins.

Thirteen institutions have already completed onboarding and are ready to use Pontes immediately, including Deutsche Bank, Santander, and Société Générale. The ECB also intends to become a user of the system and has begun preparatory work to invest a small portion of its own funds in tokenized securities.

Richard Baker, founder and CEO of Tokenovate, noted that Pontes will initially run within existing market hours but has the potential to support continuous, potentially 24/7, settlement. However, full capability is expected by 2028.