The European Central Bank has formally launched Pontes, the Eurosystem’s framework for settling tokenized transactions in central bank money. The move gives participating distributed ledger technology platforms a way to connect tokenized securities activity with central bank settlement, a step the ECB has presented as important for the further development of tokenized markets.
Alongside the launch, the ECB said it plans to invest part of its own funds in tokenized securities to build practical experience with distributed ledger technology. According to the announcement, that work is still at a preparatory stage.
Settlement layer goes live
Pontes is the Eurosystem’s solution for settlement of tokenized transactions in central bank money, sometimes described more loosely as a form of wholesale CBDC. Its launch turns a long-signaled initiative into live market infrastructure for eligible participants.
Piero Cipollone, a member of the ECB Executive Board, said central bank money can help tokenized markets scale. In the ECB’s framing, giving market participants access to that type of settlement support addresses a core requirement for broader institutional use of tokenized securities infrastructure.
ECB plans to buy tokenized securities
At the same time, the central bank said it intends to invest some of its own funds in tokenized securities. The stated goal is to gain operational experience in using DLT across several functions, including trade execution, settlement and portfolio management.
The ECB said the focus would be on securities issued by governments, agencies and supranational organizations. It also made clear that it has not yet started those investments and remains in the preparatory phase before moving ahead.
Four operators onboarded at launch
Four DLT operators that had been announced previously are live from the start of Pontes. They are Axiology, Cashlink, Clearstream and SWIAT.
The lineup includes startups Axiology and Cashlink, Deutsche Börse-owned Clearstream, and bank-backed SWIAT. Three of the four platforms are based in Germany, reflecting a similar pattern in the participant base mentioned in the report. The outlier is Lithuania’s Axiology.
Adoption focus and next steps
Axiology is a licensed platform under the EU’s DLT Pilot Regime and is led by former central banker Marius Jurgilas. He said access to settlement in central bank money removes one of the main practical barriers to wider use of tokenized securities, because institutions no longer need to choose between new DLT-based infrastructure and central bank settlement.
For now, the confirmed next step is preparatory work on the ECB’s own tokenized securities investments. With Pontes now live and the first operators connected, the immediate test will be whether central bank money settlement can support broader institutional participation in tokenized securities markets.
Source: www.ledgerinsights.com