ECB Launches Pontes to Bridge Tokenized Markets with Central Bank Money

The European Central Bank has launched Pontes, a new service that enables tokenized asset settlement in central bank money for euro-area financial institutions. The launch marks a significant step towards integrating distributed ledger technology with existing Eurosystem settlement infrastructure.

Pontes, which means 'bridges' in Latin, supports wholesale financial markets rather than consumer payments. It connects market platforms using distributed ledger technology with the Eurosystem's TARGET Services, allowing market participants to use central bank money for the cash side of tokenized trades.

The ECB describes Pontes as a distributed ledger solution for settling wholesale transactions through TARGET Services. The system lets market participants use central bank money for the cash side of tokenized trades, which is a key issue in the adoption of tokenization.

Pontes follows a testing program that ran from May to November 2024, during which the Eurosystem worked with 64 market participants on more than 50 trials and experiments. The tests processed over EUR 1.5 billion in transactions and helped shape the design of Pontes.

The ECB plans to develop the service progressively after launch, initially operating during normal European business hours, with later stages introducing round-the-clock settlement. The Eurosystem limits access to credit institutions at launch, targeting wholesale financial markets rather than households or retail users.