The European Central Bank (ECB) launched Pontes on 21 September, enabling banks and other eligible financial institutions to settle wholesale tokenised asset transactions in central bank money as Europe seeks to expand distributed ledger technology across financial markets.

Pontes connects private distributed ledger technology (DLT) platforms with the Eurosystem’s existing TARGET Services, providing a settlement option for tokenised bonds, funds and other financial assets. The ECB said the platform is intended to make central bank money suitable for an increasingly tokenised financial system.

“The Eurosystem is working to enable a more integrated, innovative and resilient European financial market in the digital age,” said Christine Lagarde, president of the ECB.

The central bank said Pontes follows tests conducted by the Eurosystem in 2024, which indicated that access to a risk-free settlement asset was important to the wider adoption of DLT in wholesale markets. Tokenised transactions have otherwise relied on commercial bank money or privately issued stablecoins to settle the cash element of trades.

The initial group using Pontes includes 13 market participants, among them Deutsche Bank, Santander, Société Générale, the European Investment Bank and KfW, alongside DLT operators including Clearstream, Axiology, Cashlink and SWIAT. The Deutsche Bundesbank has also completed onboarding as a market participant, while the ECB said further participants will connect in the coming months.

Piero Cipollone, member of the ECB’s Executive Board, said Pontes would bring the “stability and trust of central bank money to the European tokenised finance ecosystem” and help the market scale.

The platform will initially provide a core set of services during existing market hours, with enhanced functionality and longer operating hours to be introduced progressively. The ECB expects full implementation by 2028, while the wider Appia initiative is examining how an integrated ecosystem for DLT-based financial services could develop.

The ECB is expected to become a user of Pontes itself after announcing preparations to invest a small portion of its own funds in tokenised securities. The planned investments will focus initially on euro-denominated debt issued by euro area governments, regional authorities, agencies and European supranational institutions, rather than cryptocurrencies or stablecoins.

Pontes is separate from the proposed retail digital euro, which would enable consumers and merchants to make payments in central bank money. The retail project remains subject to EU legislation, with a pilot involving 36 banks and payment firms scheduled for the second half of 2027 and potential issuance targeted for 2029.

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