The European Central Bank has opened a new payment bridge between Europe’s established banking system and emerging blockchain-based financial markets. Institutions can now complete trades in digital bonds and other tokenised assets using central-bank money instead of private stablecoins.
The new service, called Pontes, connects blockchain-based trading platforms to TARGET, the Eurosystem infrastructure used to settle payments between financial institutions. It brings digital assets closer to the security of the conventional central-banking system.
Tokenisation allows bonds and other assets to be issued, traded and transferred through a shared digital ledger. Supporters believe it could accelerate transactions, increase automation and reduce reliance on intermediaries.
“The Eurosystem is working to enable a more integrated, innovative and resilient European financial market in the digital age,” ECB President Christine Lagarde said in the launch announcement. Thirteen financial institutions have joined the initial phase, including Deutsche Bank, Santander, Société Générale and the European Investment Bank.
Faster markets without private digital money
Pontes will initially operate between 08:00 and 16:00 CET on working days. The ECB plans to extend its hours and functions gradually, with full implementation expected by 2028.
“Pontes brings the stability and trust of central bank money to the European tokenised finance ecosystem,” ECB Executive Board member Piero Cipollone said. “It will give an important advantage to help it scale.”
Pontes brings the stability and trust of central bank money to the European tokenised finance ecosystem.
— Piero Cipollone, ECB Executive Board member
The ECB is also becoming a participant in the market itself. It has an own-funds portfolio worth €23 billion and plans to invest a small portion in highly rated, euro-denominated tokenised securities issued by public institutions, according to Reuters.
Not the same as digital euro
The launch will not change how Europeans pay in shops or transfer money. The separate retail digital euro remains under development and could be issued in 2029 if EU lawmakers approve the necessary legislation.
Pontes instead represents a significant operational step towards moving Europe’s wholesale financial markets onto tokenised infrastructure. It allows institutions to settle transactions without relying on private stablecoins.
