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The European Central Bank (ECB) is taking significant steps to integrate distributed ledger technology (DLT) into its financial infrastructure by enabling the settlement of DLT transactions with central bank money. This move aims to modernize Europe’s financial system and address the existing limitations for DLT adoption.
Two-pronged Approach:
The ECB has announced a two-track strategy:
* Pontes (Short-term): This initiative is designed as a single Eurosystem solution that will link DLT platforms with existing TARGET services, allowing for the settlement of DLT transactions in central bank money. A pilot launch for Pontes is anticipated in Q3 2026.
* Appia (Long-term): This more ambitious initiative aims to create a fully integrated, DLT-native settlement ecosystem that can facilitate both European and global operations. Appia will explore the creation of a wholesale Central Bank Digital Currency (CBDC) and incorporate international payment aspects.
Building on Exploratory Work:
These initiatives build upon the ECB’s extensive exploratory work on DLT conducted between May and November 2024. This work involved 64 eligible participants across nine jurisdictions and saw the settlement of close to €1.6 billion in central bank money across over 50 trials. Piero Cipollone, a member of the ECB’s executive board, highlighted the strong market interest in DLT and the use of tokens, with many financial stakeholders planning to develop and use DLT in wholesale financial markets.
Addressing Market Needs:
The ECB’s decision is particularly significant given the European Securities and Markets Association’s (ESMA) proposal to make its DLT pilot regime permanent, despite low industry participation to date. ESMA had pointed to the lack of central bank money availability as a major limiting factor for DLT adoption in Europe. By providing central bank money for DLT settlement, the ECB aims to provide regulatory clarity, boost innovation, and ensure the safety and efficiency of financial market infrastructures.
The ECB emphasizes that these initiatives underscore its commitment to supporting innovation while maintaining the safety and efficiency of the existing financial system. Both Pontes and Appia will involve market contact groups to ensure continuous dialogue and gather feedback from industry stakeholders.

Video courtesy of IPO-VID In Patrick’s Opinion

Video courtesy of IPO-VID In Patrick’s Opinion