ECB: Central Bank Money Crucial for Scaling Tokenized Markets

• Piero Cipollone, an Executive Board member of the European Central Bank (ECB), stated that tokenized central bank money is essential for the growth of Europe’s tokenized financial markets.
• The ECB plans to launch the Pontes initiative in the third quarter of 2026 to facilitate DLT-based settlement in central bank money.
• A comprehensive legal framework and public-private cooperation are cited as critical requirements to avoid a "patchwork" of regulations that could hinder market efficiency.

The Necessity of Central Bank Settlement

During a speech at the House of the Euro in Brussels, Piero Cipollone emphasized that private digital assets, such as stablecoins and tokenized deposits, cannot scale the European market alone. He argued that these assets require a public settlement anchor in the form of tokenized central bank money to ensure stability and trust. Without such an anchor, sellers of tokenized securities might be forced to accept payments in assets that carry significant price volatility or credit risk, which would ultimately restrict the market's expansion.

Roadmap for Tokenization: Pontes and Appia

The ECB is currently developing two major initiatives to modernize Europe's financial infrastructure:

• Pontes: Scheduled for an initial rollout in Q3 2026, this project aims to bridge market-driven distributed ledger technology (DLT) platforms with the Eurosystem’s TARGET Services. This connection will allow participants to settle transactions directly using central bank money.
• Appia: Originally published on March 11, this initiative provides a blueprint for a unified European tokenized financial ecosystem, with a target implementation date of 2028. It includes standards for interoperability, ensuring that assets can be moved across different DLT platforms using compatible smart contracts and data formats.

Legal Frameworks and Industry Feedback

Cipollone warned that the current lack of a holistic tokenization framework creates risks. While he acknowledged the European Commission’s proposal to extend the DLT Pilot Regime as a positive step, he cautioned that building advanced infrastructure on fragmented regulations could prevent the region from realizing the full benefits of the technology.

Industry players are already engaging with these developments. On March 20, the stablecoin issuer Circle provided feedback on the Market Integration Package, advocating for the expansion of the DLT Pilot Regime and the provision of e-money token (EMT) cash account services for authorized crypto-asset service providers. Cipollone urged banks, technology providers, and market infrastructure operators to contribute feedback to the Appia roadmap to foster effective public-private partnerships.