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Pontes brings central bank money into tokenised markets
30 Sep 2026
The Eurosystem’s new settlement bridge addresses one of tokenisation’s biggest practical barriers, but interoperability, liquidity, and post-trade integration will determine whether Europe can move from pilots to scale. Zarah Choudhary explores
Image: sono_creative/stock.adobe.com
For much of the debate around tokenisation, putting a security on a distributed ledger has been the visible part of the story. The harder question has sat on the other side of the trade: what should be used to pay for it?
With the launch of Pontes on 21 September 2026, the Eurosystem has begun to answer that question. The initiative allows wholesale transactions in tokenised assets to settle in central bank money, connecting distributed ledger technology (DLT)-based market activity with the Eurosystem’s established settlement infrastructure.
Pontes follows the Eurosystem’s 2024 exploratory work on DLT settlement, during which market participants underlined the importance of access to a risk-free settlement asset. The Central Bank of Ireland says those trials involved 64 participants and more than 50 experiments and real settlement trials. Those tests reinforced a point that has become increasingly important as tokenisation moves closer to production: institutions may be willing to experiment with new forms of market infrastructure, but they still want access to a settlement asset that does not introduce additional credit risk.
The Central Bank of Ireland argued earlier this year that central bank money should remain the ultimate settlement asset as financial markets become more tokenised, citing its role in reducing counterparty and credit risk, providing settlement finality, and limiting fragmentation in the monetary system.
Richard Baker, CEO and founder of Tokenovate, says Pontes therefore brings tokenised markets closer to the core of the euro area’s financial infrastructure.
“Connecting DLT-based assets with TARGET Services means transactions can settle against central bank money, giving banks a more scalable route to using tokenised assets within established market structures.”
From pilot to infrastructure
The significance of Pontes is not simply that it introduces another DLT initiative. Europe has already accumulated years of experimentation around tokenised securities, digital bonds, and distributed ledger settlement.
The difference is that the conversation is moving from whether tokenised assets can be created and transferred towards how they can operate inside the existing financial system at scale.
An initial group of 14 market participants has completed onboarding to Pontes, alongside four DLT operators: Axiology, Cashlink, Clearstream, and SWIAT. Banks and public-sector institutions in the first group include Deutsche Bank, Santander, Société Générale, the European Investment Bank, and KfW, while additional participants are expected to connect in the coming months.
The European Central Bank (ECB) is also preparing to use the infrastructure itself, having begun preparatory work to invest a small portion of its own funds in tokenised securities, with transactions to be settled through Pontes.
For Marius Jurgilas, CEO of Axiology, providing the cash leg removes one of the most important practical barriers facing tokenised securities.
“Institutions no longer have to choose between using new DLT infrastructure and settling in central bank money. Connecting the two gives tokenised securities the trusted cash leg they need to scale,” he informs.
However, Jurgilas adds that the infrastructure alone will not create a market.
“Putting the rails in place is only the first step. Europe now needs issuance, investment, and liquidity to follow.”
What changes for post-trade?
For asset servicers, this is where the development becomes particularly significant.
Tokenisation has often been associated with the possibility of compressing multiple stages of a securities transaction into a shared infrastructure. In theory, trade and settlement can occur together, while smart contracts can automate processes ranging from payments to corporate actions and collateral movements.
The Central Bank of Ireland notes that full atomic settlement requires both the asset and corresponding payment instrument to be available on distributed ledgers.
If the two legs can move together, the traditional separation between execution and settlement can be reduced, potentially cutting reconciliation requirements, counterparty exposures, and operational costs.
But faster settlement does not remove the broader securities lifecycle.
Custody, safekeeping, record keeping, income payments, corporate actions, regulatory reporting, and asset protection still have to be performed. The question is increasingly whether DLT changes who performs those functions, how they are performed, or where they sit within the infrastructure.
An ECB report on DLT in post-trade processes highlighted this issue several years ago. It suggested that digital asset custody could require new technical solutions around private keys and wallets, while the function itself could evolve from custody of assets towards custody of data and information. It also identified the possibility of corporate actions and dividend payments being embedded in smart contract code.
Pontes therefore does not make the traditional post-trade ecosystem disappear. Instead, it creates another layer that banks, custodians, central securities depositories (CSD), and technology providers will have to connect with existing processes.
The interoperability test
That connection may be one of the most difficult parts of the transition. DLT platforms have developed with different data structures, protocols, governance arrangements, and technical designs. At the same time, traditional securities infrastructure will not disappear overnight. Institutions are likely to operate across conventional and tokenised systems simultaneously, particularly while tokenised issuance remains a relatively small part of the overall market.
The danger is that tokenisation recreates the fragmentation it was intended to reduce.
The Central Bank of Ireland warned in March that fragmented DLT ecosystems could result in new “walled gardens”, with common technical, operational, and messaging standards needed if assets are to move efficiently between platforms.
Earlier ECB work similarly identified interoperability between DLT networks, and between DLT and conventional systems, as critical. It found that a lack of standards could prevent fragmented systems from reaching scalability and that integration with existing architecture would be necessary to avoid the creation of separate technology stacks.
Baker says the issue will become even more important as Pontes develops.
“While the service will initially operate within existing market hours, the longer-term opportunity is to support more continuous, potentially 24/7, settlement,” he points out.
“As adoption grows, that will make interoperability across platforms, custodial networks, and existing settlement systems even more important. Greater synchronisation between cash, assets, and contractual obligations will be essential if tokenisation is to reduce reconciliation, release liquidity sooner, and enable a more efficient transition towards programmable, atomic settlement.”
Pontes today, Appia tomorrow
The Eurosystem is taking a gradual approach. Pontes will initially provide a core set of services, with additional functionality and longer operating hours introduced over time. Full implementation is expected by 2028.
Running alongside it is Appia, the Eurosystem’s longer-term work on an integrated DLT-based financial ecosystem.
The initiative, involving the Eurosystem, Danmarks Nationalbank, and public and private-sector stakeholders, is expected to produce a blueprint by 2028.
The distinction matters. Pontes addresses an immediate infrastructure problem by giving tokenised wholesale transactions access to central bank money. Appia is considering the broader architecture in which those transactions could eventually operate.
The next test is therefore less about demonstrating that tokenisation works and more about whether a sufficiently deep market can develop around it.
For Europe, that means building issuance and investor demand, connecting new and existing infrastructures, establishing common standards, and ensuring that the efficiencies promised at settlement extend through custody and servicing.
Pontes provides an important piece of that architecture. Whether it becomes the bridge from years of experimentation to a scalable tokenised market will depend on what the industry builds around it.
With the launch of Pontes on 21 September 2026, the Eurosystem has begun to answer that question. The initiative allows wholesale transactions in tokenised assets to settle in central bank money, connecting distributed ledger technology (DLT)-based market activity with the Eurosystem’s established settlement infrastructure.
Pontes follows the Eurosystem’s 2024 exploratory work on DLT settlement, during which market participants underlined the importance of access to a risk-free settlement asset. The Central Bank of Ireland says those trials involved 64 participants and more than 50 experiments and real settlement trials. Those tests reinforced a point that has become increasingly important as tokenisation moves closer to production: institutions may be willing to experiment with new forms of market infrastructure, but they still want access to a settlement asset that does not introduce additional credit risk.
The Central Bank of Ireland argued earlier this year that central bank money should remain the ultimate settlement asset as financial markets become more tokenised, citing its role in reducing counterparty and credit risk, providing settlement finality, and limiting fragmentation in the monetary system.
Richard Baker, CEO and founder of Tokenovate, says Pontes therefore brings tokenised markets closer to the core of the euro area’s financial infrastructure.
“Connecting DLT-based assets with TARGET Services means transactions can settle against central bank money, giving banks a more scalable route to using tokenised assets within established market structures.”
From pilot to infrastructure
The significance of Pontes is not simply that it introduces another DLT initiative. Europe has already accumulated years of experimentation around tokenised securities, digital bonds, and distributed ledger settlement.
The difference is that the conversation is moving from whether tokenised assets can be created and transferred towards how they can operate inside the existing financial system at scale.
An initial group of 14 market participants has completed onboarding to Pontes, alongside four DLT operators: Axiology, Cashlink, Clearstream, and SWIAT. Banks and public-sector institutions in the first group include Deutsche Bank, Santander, Société Générale, the European Investment Bank, and KfW, while additional participants are expected to connect in the coming months.
The European Central Bank (ECB) is also preparing to use the infrastructure itself, having begun preparatory work to invest a small portion of its own funds in tokenised securities, with transactions to be settled through Pontes.
For Marius Jurgilas, CEO of Axiology, providing the cash leg removes one of the most important practical barriers facing tokenised securities.
“Institutions no longer have to choose between using new DLT infrastructure and settling in central bank money. Connecting the two gives tokenised securities the trusted cash leg they need to scale,” he informs.
However, Jurgilas adds that the infrastructure alone will not create a market.
“Putting the rails in place is only the first step. Europe now needs issuance, investment, and liquidity to follow.”
What changes for post-trade?
For asset servicers, this is where the development becomes particularly significant.
Tokenisation has often been associated with the possibility of compressing multiple stages of a securities transaction into a shared infrastructure. In theory, trade and settlement can occur together, while smart contracts can automate processes ranging from payments to corporate actions and collateral movements.
The Central Bank of Ireland notes that full atomic settlement requires both the asset and corresponding payment instrument to be available on distributed ledgers.
If the two legs can move together, the traditional separation between execution and settlement can be reduced, potentially cutting reconciliation requirements, counterparty exposures, and operational costs.
But faster settlement does not remove the broader securities lifecycle.
Custody, safekeeping, record keeping, income payments, corporate actions, regulatory reporting, and asset protection still have to be performed. The question is increasingly whether DLT changes who performs those functions, how they are performed, or where they sit within the infrastructure.
An ECB report on DLT in post-trade processes highlighted this issue several years ago. It suggested that digital asset custody could require new technical solutions around private keys and wallets, while the function itself could evolve from custody of assets towards custody of data and information. It also identified the possibility of corporate actions and dividend payments being embedded in smart contract code.
Pontes therefore does not make the traditional post-trade ecosystem disappear. Instead, it creates another layer that banks, custodians, central securities depositories (CSD), and technology providers will have to connect with existing processes.
The interoperability test
That connection may be one of the most difficult parts of the transition. DLT platforms have developed with different data structures, protocols, governance arrangements, and technical designs. At the same time, traditional securities infrastructure will not disappear overnight. Institutions are likely to operate across conventional and tokenised systems simultaneously, particularly while tokenised issuance remains a relatively small part of the overall market.
The danger is that tokenisation recreates the fragmentation it was intended to reduce.
The Central Bank of Ireland warned in March that fragmented DLT ecosystems could result in new “walled gardens”, with common technical, operational, and messaging standards needed if assets are to move efficiently between platforms.
Earlier ECB work similarly identified interoperability between DLT networks, and between DLT and conventional systems, as critical. It found that a lack of standards could prevent fragmented systems from reaching scalability and that integration with existing architecture would be necessary to avoid the creation of separate technology stacks.
Baker says the issue will become even more important as Pontes develops.
“While the service will initially operate within existing market hours, the longer-term opportunity is to support more continuous, potentially 24/7, settlement,” he points out.
“As adoption grows, that will make interoperability across platforms, custodial networks, and existing settlement systems even more important. Greater synchronisation between cash, assets, and contractual obligations will be essential if tokenisation is to reduce reconciliation, release liquidity sooner, and enable a more efficient transition towards programmable, atomic settlement.”
Pontes today, Appia tomorrow
The Eurosystem is taking a gradual approach. Pontes will initially provide a core set of services, with additional functionality and longer operating hours introduced over time. Full implementation is expected by 2028.
Running alongside it is Appia, the Eurosystem’s longer-term work on an integrated DLT-based financial ecosystem.
The initiative, involving the Eurosystem, Danmarks Nationalbank, and public and private-sector stakeholders, is expected to produce a blueprint by 2028.
The distinction matters. Pontes addresses an immediate infrastructure problem by giving tokenised wholesale transactions access to central bank money. Appia is considering the broader architecture in which those transactions could eventually operate.
The next test is therefore less about demonstrating that tokenisation works and more about whether a sufficiently deep market can develop around it.
For Europe, that means building issuance and investor demand, connecting new and existing infrastructures, establishing common standards, and ensuring that the efficiencies promised at settlement extend through custody and servicing.
Pontes provides an important piece of that architecture. Whether it becomes the bridge from years of experimentation to a scalable tokenised market will depend on what the industry builds around it.
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