ECB advances on-chain reserves for monetary policy

The ECB is advancing on-chain central bank reserves via Pontes and Appia, aiming to strengthen monetary policy, enable efficient DLT settlement, and maintain control as tokenisation grows in Europe.

The European Central Bank (ECB) is advancing its strategy to bring central bank reserves onto distributed ledger technology (DLT) platforms. This initiative aims to enhance monetary policy and safeguard European monetary sovereignty as financial markets increasingly adopt DLT. ECB Executive Board members emphasize that tokenized central bank money is crucial, warning that reliance on private stablecoins or commercial bank tokens could weaken central banks' control. Projects Pontes and Appia are at the core of this strategy. Pontes will connect DLT platforms to TARGET services by late 2026, while Appia explores unified or interoperable ledger architectures for the long term. The ECB's focus is on wholesale finance, not retail cryptocurrency or blockchain wallets. The goal is to enable atomic settlement, allowing assets and payments to settle within the same programmable environment. Trials show a strong market preference for risk-free central bank money as the settlement asset for tokenized transactions, reinforcing the ECB’s proactive integration of digital solutions into traditional frameworks.