ECB deploys Pontes platform to settle wholesale tokenized assets in central-bank money

The European Central Bank (ECB) launched Pontes on Monday, a platform that enables banks and other eligible financial institutions to settle tokenized-asset transactions in central-bank money.

ECB President Christine Lagarde announced the go-live at a Eurogroup meeting on Friday.

“Now, Pontes is, to summarize it quickly for you, it’s a digital euro made available for banks so that they can transact amongst themselves using tokenized assets and distributed ledger technology,” said Lagarde during a Eurogroup summit on Friday.

Pontes links market distributed-ledger technology platforms to the Eurosystem’s TARGET Services, enabling participating banks to settle tokenized wholesale transactions in central-bank money. It will only be available to eligible financial institutions and market infrastructure providers.

Tokenized bonds, funds and other financial assets need a reliable way to settle the cash side of a trade. Pontes gives European institutions a central-bank-money option, rather than requiring them to rely solely on stablecoins or tokenized commercial-bank deposits.

The platform is part of the ECB’s broader effort to keep central-bank money at the core of Europe’s increasingly tokenized financial markets. The ECB has said Pontes will be developed in stages, alongside its longer-term Appia initiative for wholesale tokenization.