ECB launches Pontes to settle tokenized assets without stablecoins

The European Central Bank (ECB) launched Pontes, a system that allows financial institutions to settle wholesale tokenized asset transactions in central bank money, providing an alternative to private settlement assets such as stablecoins.

The ECB announced Pontes’ launch on Monday as part of the Eurosystem’s strategy for tokenized finance. The system initially offers a core set of services, with full implementation expected by 2028.

Tokenization represents assets as digital tokens, typically on distributed ledger technology (DLT) networks. The ECB said it could make wholesale transactions faster and more efficient by combining issuance, trading, settlement, custody and servicing on a single platform while enabling automation through smart contracts.

“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 builds on the Eurosystem’s 2024 tests of settling DLT-based transactions in central bank money. The ECB said participants identified access to a risk-free settlement asset as crucial for wider adoption of tokenized finance.

The Eurosystem is also developing Appia, a complementary initiative exploring an integrated ecosystem for DLT-based financial services, with a blueprint expected by 2028.