ECB starts tokenized buys via new Pontes settlement rail

The European Central Bank began preparations on Monday to invest a small portion of its €23.1 billion own-funds portfolio in tokenized securities, with those purchases set to settle through Pontes, a Eurosystem settlement rail that opened the same day for banks clearing tokenized assets in central-bank money.

Pontes connects distributed-ledger market platforms with the Eurosystem's existing TARGET settlement services, letting tokenized transactions complete in central-bank money rather than commercial-bank balances. An initial onboarding group of Deutsche Bank, Santander, Société Générale and the European Investment Bank has completed onboarding, alongside DLT operators Clearstream, Axiology, Cashlink and SWIAT. The system launches with a limited service set; functionality and longer operating hours will follow, with full implementation targeted for 2028.

What the ECB is actually buying

Initial purchases will focus on euro-denominated tokenized securities issued by euro-area central governments, regional governments, agencies and European supranational institutions. The ECB's own-funds portfolio sat at €23.1 billion at the end of 2025, with government debt accounting for 73% of the mix.

The central bank has not disclosed the size of the tokenized allocation or when purchases will begin. The Executive Board will set both after preparatory work is complete. The ECB says using Pontes will give it experience spanning trade execution, settlement, technology systems and portfolio management.

Why own funds, not monetary-policy assets

Own funds sit outside the ECB's monetary-policy portfolios and earn income that helps finance its operating expenses. That separation is what lets the central bank test tokenized markets without turning the purchases into an interest-rate or quantitative-easing instrument, keeping the experiment inside the institution's investment activity rather than its policy toolkit.

Pontes and the digital euro, on separate tracks

Pontes launches ahead of Europe's consumer-facing digital euro. The ECB plans a 12-month retail pilot in the second half of 2027 involving 36 payment-service providers, merchants and central-bank staff. First issuance is targeted for 2029, subject to legislation.

Beyond Pontes, the Eurosystem is developing Appia, a broader initiative intended to produce a blueprint for an integrated European DLT financial ecosystem by 2028. The Financial Times reported in 2025 that European officials were considering networks including Ethereum and Solana among the choices, citing concerns over dollar-backed stablecoins. The underlying choice of settlement infrastructure, public chain or private ledger, is the same question Pontes is now being used to test.