Piero Cipollone: From vision to delivery: building Europe’s tokenised financial market
The European Central Bank outlines progress in building an integrated European market for tokenised financial assets, aiming to reduce fragmentation and enhance efficiency through distributed ledger technology and central bank money.
Two years ago, the ECB highlighted tokenisation and distributed ledger technology as transformative tools for Europe’s financial markets, offering efficiency gains and 24/7 operations with fewer intermediaries. The central bank warned that incompatible platforms could deepen market fragmentation, proposing an integrated ecosystem with central bank money at its core. Since then, the ECB has advanced from vision to delivery, launching projects like Pontes and Appia to develop digital asset infrastructure. The goal remains to simplify finance by consolidating processes such as issuance, trading, and settlement into shared digital environments.
Europe’s capital markets remain highly fragmented, with 31 central securities depositories, 14 central counterparties, and 323 trading venues. Over 95% of transactions in 2023 were settled within individual CSDs, limiting cross-border activity. Tokenisation could reorganise the financial value chain by enabling conditional, atomic transactions and smart contracts to automate processes like payments and compliance checks. The ECB argues that an integrated European market for tokenised assets could leapfrog legacy fragmentation, but warns that technology alone will not guarantee success.
Globally, tokenised finance is moving from experimentation to early adoption, with institutional players increasingly focusing on tokenising traditional financial instruments. Worldwide tokenised traditional assets on public blockchains grew roughly fivefold between March 2025 and March 2026. In the U.S., one private platform processed an average of USD 354 billion in tokenised repo transactions daily in March 2026, four times the volume a year earlier. In Europe, institutions are developing tokenised bonds, deposits, and settlement solutions, with European CSDs launching large-scale initiatives to tokenise securities.
The ECB notes that while tokenised real-world assets remain small and illiquid, Europe is at a critical juncture to shape the market’s architecture. Key risks include fragmentation into incompatible networks, reliance on private settlement assets without central bank money, and external dependence on non-European infrastructures. The central bank emphasises that Europe must address these challenges to ensure tokenised finance develops as an integrated, competitive market rather than a collection of disconnected platforms.