ECB Unveils Pontes, Distributed Ledger Solution for Tokenized Assets

The European Central Bank (ECB) and euro area national central banks have launched Pontes, a distributed ledger technology solution that enables wholesale transactions in tokenized assets to settle in central bank money.

Pontes connects market DLT platforms to the Eurosystem's TARGET Services, allowing tokenized trades to settle in the safest form of money. The system uses a dual settlement model, where participants can settle on the Eurosystem DLT platform with cash tokens or in T2, the real-time gross settlement system.

An initial group of 13 market participants and 4 DLT operators are ready to use Pontes immediately. These include major banks such as Deutsche Bank and Santander, as well as DLT operators like Axiology and Cashlink. The ECB's Executive Board member Piero Cipollone said that Pontes will bring the stability and trust of central bank money to the European tokenized finance ecosystem.

The launch marks the first step in the Eurosystem's programme to make central bank money fit for a tokenized future, with full implementation expected by 2028. The ECB has also started preparatory work to invest its own funds in tokenized securities, settled in central bank money through Pontes.