Announced Monday (Sept. 21), Pontes allows wholesale transactions in tokenized assets to be settled using central bank money.
“The Eurosystem is working to enable a more integrated, innovative and resilient European financial market in the digital age,” Christine Lagarde, president of the ECB, said in a news release. “We will continue to make progress in close collaboration with the market.”
As the release notes, tokenization is the process of issuing or representing assets in digital tokens, most often using distributed ledger technology (DLT) networks.
“For wholesale financial markets, this technology has the potential to make transactions faster and more efficient by bundling multiple steps of an asset’s lifecycle – from issuance and trading to settlement, custody and servicing – and by enabling automation and the development of innovative solutions through smart contracts,” the ECB said in the release.
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The ECB says the debut of Pontes follows the Eurosystem’s tests in 2024 using DLT for central bank money settlement. During those tests, public and private sector stakeholders signaled that access to a “risk-free settlement asset” was critical for the wider adoption of the technology, the news release added.
The central bank says Pontes will initially focus on a core set of services, with enhanced features and longer operating hours being introduced gradually before full implementation, expected to happen by 2028.
“Pontes brings the stability and trust of central bank money to the European tokenised finance ecosystem,” said Piero Cipollone, member of the ECB’s Executive Board. “It will give an important advantage to help it scale.”
Meanwhile, the ECB continues to work on its retail digital euro efforts. Last week, the central bank called for online and mobile merchants to take part in a digital euro pilot, which is expected to begin in the second half of 2027 and last 12 months.
The bank says this effort gives merchants a chance to collaborate with the ECB and euro area national central banks, obtain firsthand experience of a simulated digital euro ecosystem and offer feedback that will shape the digital euro’s technical specifications.
As covered here in June, concerns about overreliance on American payment providers such as Mastercard and Visa — along with the White House’s support of stablecoins — has added momentum to the digital euro project, which began in 2023 but stagnated amid debate among nations and lawmakers.
“The current way that money movement is being done is being totally rearchitected,” Taurus Co-Founder and Managing Partner Lamine Brahimi said in an interview with PYMNTS in July.
“Most credit card payments in the Eurozone are held through American credit card schemes. And for me, the digital euro is a way to provide an alternative,” he added.
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