ECB Revives Tokenized Money Push with Pontes, Appia Plans

• The aim is to make tokenized assets transferable over various DLT platforms via shared data formats and compatible smart contract standards. 
• The shorter-term track aims at practical settlement tools, and the longer-term track is Appia, which is meant to aid in shaping a broader European tokenized financial system. 

The European Central Bank has revived its efforts for tokenized central bank money as Europe works to make a bigger tokenized financial market. 

The executive board member of the bank, Piero Cipollone, mentioned tokenized deposits and stablecoins will require a public settlement base in central bank money if the market is to broaden over the region. 

Cipollone gave a speech in Brussels on Monday in which he mentioned that tokenized central bank money is required as a settlement anchor for tokenized securities, deposits and stablecoins. 

He alerted us that without it, market members may get payment in assets they don’t want to hold due to price volatility or credit concerns. His statement positions public money in the core of the ECB’s tokenisation plan. 

What’s Pontes? 

The ECB has been making that plan via Pontes, the Eurosystem’s distributed ledger settlement project. Pontes is made in a way to link DLT-based market platforms having the Eurosystem’s TARGET services so transactions can settle in central bank money. 

The ECB also mentioned that Pontes is due for a preliminary rollout in the Q3 of this year. The first phase is designed to meet quick market demand and allow participants to settle DLT-based transactions in central bank money. 

Pontes is one of the wider two-track plans. The shorter-term track aims at practical settlement tools, and the longer-term track is Appia, which is meant to aid in shaping a broader European tokenized financial system by 2028. 

The ECB further added that Appia will be made with market input. It is meant to outline how tokenized finance can progress in Europe while keeping central bank money as the core layer for trust and settlement. 

One part of Appia aims at interoperability. The aim is to make tokenized assets transferable over various DLT platforms via shared data formats and compatible smart contract standards. 

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