ECB launches blockchain settlement link for euro financial markets

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ECB launches blockchain settlement

Highlights

ECB launches Pontes to link its payment system with blockchain trading, enabling euro settlements backed by the ECB and starting with Deutsche Bank and Santander.
Pontes operates weekdays from 8 a.m. to 4 p.m. CET, promising faster, more efficient transactions through greater automation and integration of asset lifecycles.
ECB will invest part of its €23 billion in own funds into blockchain-based, highly-rated euro-denominated public sector debt, expanding its digital securities strategy.

Pontes connects ECB payments to blockchain trading

As reported by Reuters, the European Central Bank launches Pontes on Monday to link its payment system with blockchain-based financial markets, allowing banks and investors to settle transactions in euros backed by the ECB rather than stablecoins or other forms of private money.

The service starts with an initial group of users that includes Deutsche Bank and Santander, which have completed onboarding and are able to use the platform from the outset. Pontes initially operates from 8 a.m. to 4 p.m. CET on business days, with the ECB saying services will expand over time.

The central bank says the technology can make transactions faster and more efficient by combining multiple steps in an asset's lifecycle and enabling greater automation. The move reflects a broader shift in finance, where assets are issued and traded using shared digital ledgers instead of traditional market infrastructure.

Digital securities strategy broadens across Europe

The ECB also says it will begin investing a small portion of its 23 billion euros in own funds into blockchain-based securities. The purchases focus on highly rated, euro-denominated debt issued by public institutions.

The initiative follows comments last month from ECB board member Isabel Schnabel, who said central banks should go on-chain to reduce dependence on private alternatives. Other central banks are pursuing similar projects, including the Swiss National Bank through Project Helvetia and the Bank of England through its Digital Securities Sandbox.

The ECB is also developing a digital euro for consumers, partly to reduce the bloc's reliance on U.S. credit cards, and it aims to launch that project in 2029.

Our earlier coverage of the ECB’s Economic Bulletin highlighted how swings in wholesale natural gas prices are reaching consumer gas inflation much faster across much of the euro area, increasing the risk of a quicker inflation response. The ECB also noted that electricity prices have become less sensitive to gas thanks to higher renewable output, even as elevated gas costs add to pressure for further rate moves.

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