ECB Shifts Stance on Blockchain, Embracing Tokenization of Central Bank Money

The European Central Bank (ECB) is shifting its stance on distributed ledger technology (DLT). Isabel Schnabel, an ECB executive board member, believes central bank money should be 'on-chain', meaning it runs on blockchain rails alongside other tokenized assets. This marks a significant change in the ECB's approach to DLT, which was previously seen as a regulatory subject related to stablecoins and the crypto market.

The Pontes project is expected to launch in September 2026, synchronizing TARGET services with DLT platforms operated by market participants. The Appia project aims to provide a blueprint for a fully tokenized European market by 2028. Schnabel stated that central bank money must be on-chain to make financial transactions faster, safer, and more programmable.

Pontes will initially synchronize the ECB's existing TARGET services with DLT platforms, eventually achieving 24/7 operation. The Appia project outlines the long-term architecture for a tokenized asset market in Europe, with a full blueprint expected by 2028. Experiments testing interoperability between DLT platforms and existing settlement rails have processed about 1.6 billion euros among 64 participants in nine jurisdictions.