ECB Moves to Tokenize Central Bank Money

European Central Bank Executive Board member Isabel Schnabel made headlines at the Jackson Hole Economic Policy Symposium by stating that central bank money must move onchain. According to her, stablecoins lack the ability to expand liquidity rapidly during periods of financial stress, and only a central bank can fill this gap. Schnabel believes that tokenization technology can make financial transactions faster, safer, and more programmable if the safest asset in the system, central bank money, lives on the same rails as everything else being tokenized.

Pontes is a project launched by the ECB, which will synchronize TARGET Services with DLT platforms run by market participants. This synchronization is expected to happen in September 2026. Schnabel stated that over time, Pontes will support settlement finality directly on a Eurosystem-operated DLT platform, complete with smart-contract functionality and eventually 24/7 operation.

Another project mentioned was Project Appia, which aims to create a full tokenized-market blueprint for Europe by 2028. This project targets the longer-term architecture and technical standards that a genuine European market in tokenized assets would need.