ECB Unveils Pontes to Settle Tokenized Assets in Central Bank Money

The European Central Bank (ECB) has launched Pontes, a distributed ledger technology solution that enables wholesale transactions in tokenized assets to settle in central bank money. The launch marks the first step in the Eurosystem's program to make central bank money suitable for a tokenized future.

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

An initial group of 13 market participants and four DLT operators are ready to use Pontes immediately. The ECB has also started preparatory work to invest a small portion of its own funds in tokenized securities, settled in central bank money through Pontes.