Europe's central banks have taken a concrete step into the world of blockchain-based finance. On Monday, the Eurosystem launched Pontes, a platform that allows wholesale transactions in tokenised assets — stocks, bonds, and other instruments recorded as digital tokens on distributed ledgers — to settle in the safest form of money available: reserves held at the central bank itself.
The move addresses one of the key barriers that has held back tokenised markets: the absence of a risk-free settlement asset. Until now, tokenised trades have typically settled in commercial bank money or stablecoins, both of which carry credit risk that large institutions are reluctant to accept. By enabling settlement in central bank money, Pontes aims to bring the security of traditional finance to the digital asset space.
“The Eurosystem is working to enable a more integrated, innovative and resilient European financial market in the digital age,” said ECB President Christine Lagarde in a statement.
Thirteen institutions ready to use Pontes
Thirteen institutions have completed onboarding and are ready to use the system immediately. These include major banks such as Deutsche Bank, Santander, Société Générale, and KfW, as well as the European Investment Bank. Four ledger operators, including Clearstream, are also connected.
The ECB itself intends to become a user. In a separate announcement, it said it has begun preparatory work to invest a small portion of its own funds in tokenised securities, with purchases settled through Pontes. The initial focus will be on euro-denominated debt issued by euro area governments, regional authorities, agencies, and European supranational institutions.
The own-funds portfolio sits outside monetary policy and generates income to cover the bank's running costs. No amount was specified, and the Executive Board will decide on timing once the groundwork is complete.
“Pontes brings tokenised markets another step closer to the core of the euro area's financial infrastructure,” said Richard Baker, founder and CEO of Tokenovate, a firm that builds technology for post-trade processing and tokenised settlement. Baker noted that the service will initially run within existing market hours, but that “the longer-term opportunity is to support more continuous, potentially 24/7, settlement.”
Europe catches up on 24/7 trading
That gap is where Europe is playing catch-up. American markets have moved faster: the New York Stock Exchange is building a blockchain-based venue for trading tokenised shares and funds around the clock, and BlackRock has run a tokenised money market fund since 2024. Pontes itself will only reach full capability, with longer operating hours and enhanced features, by 2028.
The two sides are also taking different routes. Washington, under US President Donald Trump, has abandoned plans for a Federal Reserve digital currency and backed privately issued stablecoins instead. Frankfurt, by contrast, is betting that public central bank money should sit at the centre of the system.
Where the digital euro stands
Pontes is aimed at banks and markets, not consumers. The retail equivalent, the digital euro, would let the public make everyday payments directly in central bank money. That project is further from reality. The European Parliament's economic committee approved its position in June, opening negotiations with member states, and final legislation is targeted for the end of this year. If that holds, a pilot involving 36 payment providers will begin in September 2027, with first issuance possible in 2029.
The launch of Pontes is a significant milestone for the Eurosystem's digital agenda, but it also highlights the competitive pressure from across the Atlantic. As Europe builds its own infrastructure, the question remains whether it can move quickly enough to keep pace with the rapid evolution of global financial markets.
