ECB launches Pontes for tokenised asset settlement

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The European Central Bank (ECB) has launched Pontes, a system that allows financial institutions to settle wholesale tokenised asset transactions in central bank money.

The system provides an alternative to private settlement assets such as stablecoins. It is part of the Eurosystem’s strategy for developing tokenised financial markets, with an initial set of services available now and full implementation expected by 2028.

Tokenisation represents assets as digital tokens, often using distributed ledger technology (DLT). The ECB said the technology could make wholesale transactions faster and more efficient by bringing issuance, trading, settlement, custody and servicing together 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.