ECB-backed tokenisation framework expands settlement options for European banks

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ECB tokenisation expands bank settlement

Highlights

From 21 September 2026, DLT transactions can settle in euro central bank money via Pontes, granting banks risk-free settlement for tokenised assets.
Since March 2026, DLT-based assets in central securities depositories qualify as collateral for Eurosystem credit operations, enhancing liquidity support and integration.
European central securities depositories launched DLT-issued securities services to operate alongside legacy infrastructure amid rising issuer interest and cross-Atlantic regulatory support.

Euro settlement and collateral access widen

As reported by the European Central Bank, distributed ledger technology transactions can now be settled in euro central bank money following the launch of Pontes on 21 September 2026. The step gives banks and other market participants access to a risk-free settlement asset for tokenised financial activity, marking a move beyond experimentation in European markets.

Since March 2026, DLT-based assets issued in central securities depositories can also be mobilised as eligible collateral in Eurosystem credit operations. That change integrates tokenised instruments more directly into the existing collateral framework and supports liquidity access against qualifying assets.

The ECB presents the Eurosystem as a catalyst for market innovation through three functions, supplying a risk-free settlement asset, providing liquidity against collateral and supporting an integrated ecosystem. Together, those roles are aimed at helping tokenised finance connect with mainstream banking and post-trade processes.

Issuer demand and market infrastructure evolve

Engagement with European sovereign issuers indicates growing interest in tokenised issuance, while supranational participants are also exploring the market. A Eurogroup+ statement on digital finance dated 9 July 2026 points to a broader policy backdrop for that development.

European central securities depositories have launched services for DLT-issued securities that operate alongside existing infrastructure, showing that market utilities are adjusting without abandoning current systems. The trend also extends beyond Europe, with SEC staff no-action relief issued in December 2025 allowing DTCC to tokenise existing securities for three years in the U.S.

Across the financial value chain, the cited benefits include round-the-clock transactions, smart contract automation, synchronous exchange of assets and the removal of reconciliations. In issuance, tokenisation is linked to lower costs, broader SME access and fractional ownership, while trading, post-trade servicing and collateral management may benefit from atomic delivery versus payment, shorter cycles and more automated corporate actions.

In our previous coverage of Mario Draghi’s warning on the risks of keeping interest rates above growth rates, we outlined how prolonged tight policy can worsen debt dynamics and increase pressure for inflationary outcomes. The article argued that central banks should prioritise price stability while aiming for the lowest rate path consistent with that goal, so as not to choke off productive investment, and it highlighted proposals such as deeper EU market integration and targeted public funding to support long-term growth.

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