Eurosystem Launches Wholesale Tokenisation Platform

The European System of Central Banks (Eurosystem) has unveiled Pontes, a platform for wholesale tokenised asset transactions that can be settled in central bank money, marking the central banks’ first step in implementing tokenised financial solutions for the bloc.

Pontes is built upon distributed ledger technology (DLT), and enables links to the EU’s TARGET payments system from DLT platforms, although the Eurosystem says the rollout will be in phases, with more market participants joining at the various stages. An initial group of market participants and DLT operators has completed onboarding, ABANCA, BayernLB, Caisse des Dépôts et Consignations, Cecabank, Deutsche Bank, Deka Bank, DZ Bank, European Investment Bank, Kreditanstalt für Wiederaufbau, Memo Bank, NRW.BANK, Santander and Société Générale are banks on the platform, as are market DLT operators Axiology, Cashlink, Clearstream and SWIAT. The Deutsche Bundesbank has also onboarded in a market participant capacity.

Offering a single Eurosystem solution in a consolidated offering that combines the strengths of the three interoperability solutions previously explored, the Eurosystem explains market participants can settle transactions on the Eurosystem DLT platform with cash tokens, or in T2, the Eurosystem’s real-time gross settlement (RTGS) system. Final settlement in central bank money for the cash leg is achieved once the corresponding transaction is completed in T2, ensuring legal certainty and robustness. 

This provides, the central banks state, a reliable interoperability mechanism. Delivery versus payment (DvP) and other transactions requiring all-or-none settlement are enabled via the Hash-Link protocol, ensuring secure and synchronised settlement across platforms. Finally, Pontes supports end-to-end processing and seamless interaction with T2, improving operational efficiency and reducing the need for manual intervention.

“The Eurosystem is working to enable a more integrated, innovative and resilient European financial market in the digital age,” says Christine Lagarde, president of the ECB. “We will continue to make progress in close collaboration with the market.”

Piero Cipollone, member of the ECB’s Executive Board, adds, “Pontes brings the stability and trust of central bank money to the European tokenised finance ecosystem. It will give an important advantage to help it scale.”