ECB moves to put the Euro on-chain, reshaping Europe’s digital settlement landscape
The European Central Bank is advancing a tokenized euro for institutional settlement, with the Pontes project set to launch in September connecting market blockchain platforms to TARGET Services, according to BigGoFinance.
Executive Board member Isabel Schnabel outlined the plan at Jackson Hole, positioning the initiative as a programmable central bank reserve targeting wholesale markets rather than retail users. She argued that stablecoin issuers cannot create liquidity during market stress, citing the 1907 US banking panic, but maintained that private tokens should serve as complements to central bank money.
The tokenized euro could challenge stablecoins in institutional securities settlement while leaving room for their use in payments and trading. A 2024 pilot involving 64 institutions settled nearly €1.6 billion. The Appia project will decide the final architecture by 2028.
Pontes design overwiew
Pontes Launches in September
The near-term vehicle for the tokenized euro is Pontes, a Eurosystem project with a go-live date now set for September 21, 2026. It will connect market distributed ledger technology platforms with TARGET Services, the eurozone’s real-time gross settlement infrastructure, enabling atomic settlement where transactions either complete fully or not at all.
At launch, legal finality will remain within T2, the existing RTGS system. Participants will be able to choose between settling with cash tokens on a Eurosystem ledger or completing the cash leg in T2. The design incorporates Hash-Link technology for synchronized delivery-versus-payment transactions. Future upgrades will add smart contracts, continuous operations, and full on-chain finality, at which point the tokenized euro could support programmable repo operations and automated collateral calls.
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Pontes is the Eurosystem’s distributed ledger technology (DLT) solution that links market DLT platforms and TARGET Services to settle DLT-based wholesale transactions in central bank money. It builds on the successful results of the exploratory work on new technologies for wholesale central bank money settlement.
Pontes is part of a single Eurosystem programme that seeks to leverage DLT and tokenisation for Europe’s wholesale financial market.
