ECB Races to Create Common European Market for Tokenized Assets
The European Central Bank (ECB) is working on two projects to bring tokenized financial transactions into central bank money and create a common European market for digital assets. The first project, Pontes, aims to connect financial platforms based on distributed ledger technology (DLT) to the TARGET services of the Eurosystem by 2026. This will allow for the settlement of transactions in central bank money, reducing the risk of fragmentation in European capital markets.
The second project, Appia, is focused on creating a model for an integrated European market for tokenized assets. It aims to establish standards, interoperability, and a legal framework for cross-border transactions by 2028. The ECB warns that the development of incompatible platforms could recreate fragmentation in digital form, making Europe dependent on external infrastructures.
The value of traditional financial assets tokenized on public blockchains has increased globally by about five times between March 2025 and March 2026, from approximately €4.7 billion to €23.3 billion. Tokenization involves the digital representation of a financial asset, such as a bond or deposit, in the form of a token that can be recorded and transferred in a digital system.