ECB to invest part of own funds in tokenised securities, with settlement via Pontes
The European Central Bank will invest a portion of its own funds in tokenised securities to gain experience in distributed ledger technology and support the Eurosystem’s digital strategy, with settlements processed via the Pontes system.
The European Central Bank (ECB) has initiated preparatory steps to allocate a limited share of its own funds toward tokenised securities, aiming to deepen its practical understanding of distributed ledger technology (DLT) in financial markets. This initiative targets the ECB’s non-monetary policy portfolio, which generates revenue to cover operational costs unrelated to supervisory functions. The move aligns with the Eurosystem’s broader objective of modernising central bank money for the digital era.
Key components of this strategy include Pontes, the Eurosystem’s platform for settling tokenised assets in central bank money, and Appia, an initiative designed to establish a framework for a tokenised financial ecosystem in Europe. The ECB’s direct investments will provide hands-on experience across the entire investment process, from trade execution to settlement and portfolio oversight.
Purchases will be settled exclusively in central bank money through Pontes, with initial investments focused on euro-denominated securities issued by euro area central governments, regional authorities, agencies, and European supranational institutions. The ECB’s Executive Board will finalise operational details and timing after assessing progress in tokenised issuances and the evolving European tokenised financial landscape.
The ECB’s engagement in tokenised securities reflects its commitment to adapting to technological advancements in financial markets while maintaining stability and operational efficiency. This approach ensures the central bank remains prepared for future developments in digital asset infrastructure.