The Eurosystem’s launch of Pontes brings central bank money into tokenised finance, creating a link between DLT-based markets and established central bank settlement infrastructure while supporting the wider development of Europe’s digital financial system
The Eurosystem has taken a major step towards bringing central bank money into Europe’s growing tokenised financial market with the launch of Pontes on 21 September 2026. The new settlement solution allows wholesale transactions in tokenised assets to be settled in central bank money, connecting distributed ledger technology (DLT) platforms with the Eurosystem’s existing TARGET Services infrastructure. The move is intended to provide a trusted settlement asset for tokenised markets while allowing banks and market infrastructures to develop new forms of digital finance.
Tokenisation involves representing financial assets as digital tokens, usually on DLT networks. In wholesale markets, this can bring several parts of a transaction together, including issuance, trading, settlement, custody and servicing. Smart contracts can also automate parts of the process. However, the wider use of tokenised assets depends not only on the technology used to represent the asset but also on how the cash leg of a transaction is settled.
Central bank money is a direct claim on a central bank and is generally regarded as a risk-free settlement asset. Without access to it, transactions involving tokenised securities could instead rely on commercial bank money or other settlement assets that carry different forms of credit or counterparty risk. The ECB has argued that having a trusted public settlement anchor can give market participants greater confidence as tokenised markets develop.
Pontes is designed to bridge market DLT platforms and TARGET Services. Rather than creating a completely separate settlement system, the solution is intended to connect emerging DLT-based markets with established Eurosystem infrastructure. This approach could help financial institutions experiment with tokenised assets while retaining access to central bank settlement.
The launch follows the Eurosystem’s exploratory work in 2024, which tested different ways of settling DLT-based transactions in central bank money. That work involved 50 trials across nine jurisdictions, with transactions worth about EUR 1.6 billion. The findings helped shape the Eurosystem’s decision to move from experimentation towards an operational solution.
The initial version of Pontes will provide a core set of services, with further features and longer operating hours planned over time. The Eurosystem expects full implementation by 2028. A number of banks and market infrastructure providers have already completed onboarding, while other participants are expected to connect in the coming months.
The first group includes banks such as ABANCA, BayernLB, Cecabank, Deutsche Bank, Deka Bank, DZ Bank, Santander and Société Générale. The European Investment Bank, KfW and several other public and private institutions are also participating, alongside DLT operators including Axiology, Cashlink, Clearstream and SWIAT. The Deutsche Bundesbank has also joined as a market participant.
Building a wider tokenised financial market
Pontes forms part of a broader Eurosystem strategy built around two connected initiatives. Pontes is the shorter-term track, providing a way for DLT-based transactions to use central bank money today. Appia is the longer-term track, which aims to develop a blueprint for a more integrated European tokenised financial ecosystem by 2028.
Since March 2026, the Eurosystem has accepted certain marketable assets issued through DLT-based services operated by central securities depositories as eligible collateral for its credit operations. This means the Eurosystem is beginning to adapt parts of its existing market and monetary policy infrastructure to accommodate DLT-based assets, subject to its existing requirements.
The ECB is also gaining direct experience with tokenised securities. On 21 September, it announced preparatory work to invest a small part of its own funds in tokenised securities, with the transactions to be settled through Pontes. Initial investments are expected to focus on euro-denominated securities issued by euro area governments, regional governments, agencies and European supranational institutions.
For the ECB, the exercise is intended to provide practical experience across the investment lifecycle, including trade execution, settlement, systems and portfolio management. It also gives the central bank first-hand experience of the operational issues that financial institutions may face as tokenised markets develop.
Why the settlement layer matters
One of the central challenges for tokenised finance is that innovation can happen at different speeds across different parts of the financial system. A bank may be able to issue a tokenised security or execute a trade on a DLT platform, but the transaction still needs a reliable way to exchange the asset and cash.
Pontes addresses this issue by bringing central bank money into the DLT environment. This can allow the securities and cash legs of a transaction to be connected more closely, while providing the settlement certainty associated with central bank money. The wider aim is to make tokenised markets easier to scale without forcing participants to give up the established role of central bank settlement.
The Eurosystem’s work also reflects a broader change in how central banks are approaching tokenisation. Rather than treating DLT solely as a technology used by private financial institutions, the Eurosystem is examining how its own infrastructure can work with tokenised markets. This includes settlement, collateral and direct investment experience.
Recent work through Project Agorá has added to this direction. The project, led by the Bank for International Settlements and the Institute of International Finance with participation from the Eurosystem and other central banks and financial institutions, tested tokenised central bank reserves and tokenised commercial bank deposits for wholesale cross-border payments. The project demonstrated atomic settlement across currencies and jurisdictions in a prototype environment.
Boosting the Eurosystem
The launch of Pontes does not mean that tokenised finance has reached full scale. The technology, market standards, legal frameworks and business models are still developing. The Eurosystem will need to expand the functionality of Pontes while continuing to work with banks, market infrastructures, technology providers and regulators.
Interoperability will also remain important. If tokenised markets develop around isolated networks, liquidity could become divided between platforms. The Eurosystem’s Appia work is therefore intended to look beyond a single settlement solution and consider how different parts of the European financial market can operate within a more connected digital environment.
For banks and financial market infrastructures, Pontes provides a new way to test tokenised financial products while keeping central bank money at the centre of settlement. For the Eurosystem, it is also a way to ensure that the euro and central bank settlement remain relevant as financial markets move towards greater use of DLT and programmable transactions.
Pontes represents an attempt to connect emerging tokenised markets with established central bank infrastructure, while Appia provides a longer-term framework for considering how those markets could develop. Together, the initiatives show how the Eurosystem is seeking to adapt the foundations of European finance to a more digital and tokenised market.
