The European Central Bank (ECB) has greenlit a dual-track initiative aimed at settling distributed ledger technology (DLT) transactions using central bank money. The move is part of a broader effort to modernise Europe’s financial market infrastructure while safeguarding monetary stability and security.
Pontes: Short-Term Blockchain Integration with TARGET Services
The first component of the plan, dubbed Pontes, is designed to offer a near-term solution by linking DLT platforms with the Eurosystem’s TARGET Services—the backbone of eurozone payments and securities settlement.
A pilot for Pontes is set to begin by the end of Q3 2026. It will build on insights from the ECB’s 2024 exploratory trials, which included more than 50 experiments and 64 participants, all focused on testing a unified settlement environment using central bank money.
“The decision is in line with the Eurosystem’s commitment to supporting innovation without compromising on safety and efficiency in financial market infrastructures,” the ECB noted in its official statement.
Appia: Long-Term Vision for an Integrated DLT Ecosystem
The second track, known as Appia, targets a long-term framework. Its goal is to establish an integrated DLT ecosystem across Europe that ensures both domestic efficiency and global interoperability.
Under Appia, the ECB will continue to investigate the use of DLT in wholesale central bank settlements, fostering collaboration with both public institutions and private sector stakeholders.
Central Banks Embrace Blockchain Settlements
The ECB’s announcement aligns with a global trend among central banks examining the use of blockchain for financial settlements. Notably, the Bank of England, in collaboration with the BIS London innovation hub, conducted a successful trial in 2023. The experiment showcased how DLT could handle large-scale interbank transactions, enhance real-time gross settlement (RTGS) systems, and reduce costs by connecting with diverse financial infrastructures.
The ECB’s two-track plan underscores a clear intent to future-proof Europe’s financial infrastructure while aligning with the broader shift towards blockchain-based modernisation in global finance.
