The European Central Bank is accelerating its strategy to prepare Europe’s financial system for tokenised assets, unveiling new initiatives designed to allow distributed ledger platforms to settle transactions directly in central bank money.
In a blog published on 12 March, ECB Executive Board member Piero Cipollone said projects known as Pontes and Appia aim to ensure that emerging digital financial markets remain anchored in safe public money while supporting innovation and European financial sovereignty.
The initiatives form part of a broader effort by the Eurosystem to modernise the role of central bank money as financial markets shift toward tokenisation and distributed ledger technologies.
Building infrastructure for tokenised finance
Tokenisation allows financial assets such as bonds or securities to be represented digitally on distributed ledger systems. According to the ECB, this technology could enable faster settlement, lower operational risks and more integrated financial markets by allowing the entire lifecycle of an asset, from trading to settlement and custody, to occur on a single platform.
But for these markets to function safely, they still require a trusted settlement asset. Central bank money has historically played that role in wholesale financial infrastructure, where banks settle large transactions using deposits held at the central bank.
The ECB argues that the same principle must apply in tokenised markets.
“Investors will need a safe asset to settle transactions – central bank money,” Cipollone wrote.
Through the Eurosystem’s Pontes initiative, the ECB plans to enable settlement of distributed ledger based wholesale transactions in central bank money starting in the third quarter of 2026. Initially, the system will connect the Eurosystem’s existing TARGET Services infrastructure with external distributed ledger platforms.
This approach would allow tokenised financial transactions to settle using central bank money without requiring an entirely new infrastructure from the outset.
Appia roadmap for next-generation financial infrastructure
Alongside Pontes, the ECB has also launched a new initiative called Appia, which aims to design the next generation of European financial market infrastructure.
According to the ECB, Appia will be developed through a public-private collaboration with financial institutions and technology providers. The project will guide the long-term integration of tokenised central bank money directly into distributed ledger systems.
The ECB said the roadmap will also encourage the private sector to develop compatible market solutions while maintaining interoperability and competition within Europe’s financial system.
Ultimately, the infrastructure is expected to support tokenised forms of euro central bank money that can act as the settlement anchor for digital financial markets.
Strategic implications for Europe
Beyond technological change, the ECB framed the initiatives as part of a broader strategy to strengthen Europe’s financial autonomy.
Financial infrastructure has increasingly taken on geopolitical significance as payments and capital markets become more digital. According to Cipollone, relying too heavily on non-European infrastructure could create long-term strategic vulnerabilities.
“If Europe does not build its own digital roads, it risks having to rely exclusively on those built by others,” he wrote.
The ECB believes that an integrated European ecosystem for tokenised finance could reduce fragmentation in financial markets while supporting the EU’s broader goal of building a savings and investments union.
At the same time, the bank emphasised that central bank money will remain the anchor of trust in the financial system, even as technologies evolve.
The work on tokenised settlement infrastructure complements the ECB’s parallel efforts to develop the digital euro as a digital form of public money for retail payments.