ECB Links Payment System to Blockchain-Based Markets with Pontes

The European Central Bank (ECB) has launched a new service called Pontes that links its payment system to blockchain-based financial markets. This move reflects the central bank's effort to adapt to the growing use of blockchain in finance.

Pontes allows banks and investors to settle blockchain-based transactions using euros backed by the ECB, rather than stablecoins or other forms of private money. A first group of users, including Deutsche Bank, Santander, and Clearstream, have completed onboarding and will be able to use Pontes from the start.

The platform will initially operate between 8 a.m. and 4 p.m. CET (0600-1400 GMT) on business days and expand its services over time. The ECB believes that blockchain technology has the potential to make transactions faster and more efficient by bundling multiple steps of an asset's lifecycle.

The ECB will also begin investing a tiny part of its €23 billion own funds in blockchain-based securities, focusing on highly rated, euro-denominated debt issued by public institutions. This move is part of the central bank's effort to reduce reliance on private alternatives and explore the potential benefits of blockchain technology.