- The European Central Bank launched Pontes, a system for settling tokenized asset transactions in central bank money.
- Pontes offers an alternative to private settlement assets like stablecoins, with gradual service expansion.
- Full implementation is expected by 2028, with more financial institutions set to join the platform.
- Tokenization on distributed ledger technology could make wholesale transactions faster and more efficient through smart contracts.
The European Central Bank launched Pontes on Monday, introducing a system that allows financial institutions to settle wholesale tokenized asset transactions directly in central bank money. The initiative, part of the Eurosystem’s strategy for tokenized finance, provides a regulated alternative to private settlement assets such as stablecoins.
Pontes initially offers a core set of services, with the ECB announcing that full implementation is expected by 2028 as more participants join. Tokenization represents assets as digital tokens on distributed ledger technology networks, potentially making wholesale transactions faster and more efficient.
Consequently, combining issuance, trading, settlement, custody, and servicing on a single platform could streamline operations. Automation through smart contracts further enhances the system’s capabilities, reducing manual steps and settlement times. Meanwhile, the gradual rollout allows the Eurosystem to integrate additional services and participants over the next two years.
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