ECB’s Cipollone backs tokenized central bank money for markets

European Central Bank Executive Board member Piero Cipollone argued in Brussels on Monday that Europe’s tokenized markets will struggle to scale without tokenized central bank money serving as a public settlement anchor. He pointed to Pontes, the Eurosystem’s distributed ledger settlement project, which targets an initial launch in the third quarter of 2026 and is designed to link market DLT platforms with the Eurosystem’s TARGET Services for settlement in central bank money.

Speaking at the House of the Euro, Cipollone explained that settling tokenized transactions in central bank money can lower counterparty and credit risks and help institutions adopt new technology with greater confidence. Pontes aims to let banks, market infrastructures, and other institutions settle transactions recorded on DLT by connecting those platforms to existing payment and securities services operated by the Eurosystem.

“Without tokenised central bank money, a seller of a tokenised security may receive payment in an asset they are not comfortable holding – one exposed to price volatility or credit risk – which limits the market’s ability to scale,” he noted.

His remarks build on the ECB’s Appia roadmap, released on March 11, which outlines a path to support a European tokenized financial ecosystem by 2028. One Appia component focuses on interoperability so that tokenized assets can move between different DLT platforms using compatible data formats and smart contract standards. The ECB has invited market operators, banks, custodians, and technology providers to review the proposals and submit feedback.

Cipollone called for closer public‑private cooperation and clearer rules alongside settlement in central bank money. He indicated that Europe may ultimately require a dedicated legal framework to enable issuance, trading, and transfer of tokenized assets across the bloc. He described the European Commission’s proposal to extend the DLT Pilot Regime as an important development but cautioned against relying on fragmented rules, warning that a “patchwork of regulations” could limit the benefits of new settlement infrastructure.

Industry participants are engaging with policymakers. As we reported earlier, Circle urged UK to blend MiCA and US rules for stablecoins. On March 20, stablecoin issuer submitted feedback to the European Commission’s Market Integration Package, urging lawmakers to broaden the DLT Pilot Regime and allow e‑money token cash account services for authorized crypto‑asset service providers.

The ECB has not yet identified the institutions expected to join Pontes’ initial phase. The third‑quarter 2026 target is intended to provide a pathway for settling DLT‑based transactions in central bank money while technical standards and legal considerations develop. According to the Appia roadmap, the ECB is exploring how assets issued on one DLT could be transferred or settled on another without re‑issuance when common technical and contractual standards are in place. Cipollone encouraged industry participants to engage with the Appia proposals and share operational input ahead of Pontes’ first rollout.