ECB Taps Blockchain to Reinvent EU Financial Structures

The European Central Bank's incorporation of blockchain into the EU's financial structures has raised questions about the technology's revolutionary possibilities. Some have noticed that while they were initially fascinated by blockchain, more recently they tend to express surprise and ask if it still exists.

This is not a sign that blockchain has failed or been conquered by institutions. Rather, the ECB is taking useful elements of blockchain and applying them to existing systems. The EU initiative, called Pontes, connects private DLT-based platforms with TARGET, the Eurosystem's payment mechanism.

Pontes' role is to coordinate the delivery of tokenized bonds with central bank payments in money. If both operations are executed, or if one fails, Pontes will ensure that the bond is delivered or the payment made accordingly. This marks a significant step towards mainstream adoption of blockchain technology.