Piero Cipollone of the European Central Bank said tokenized deposits and stablecoins will require tokenized central bank money as a public settlement anchor if Europe’s tokenized financial markets are to scale.
Speaking on Monday in Brussels, Cipollone pointed to Pontes, a distributed ledger technology (DLT) settlement initiative from the Eurosystem, designed to link market DLT platforms with TARGET Services and enable settlement in central bank money.
He warned that without such infrastructure, participants in tokenized markets may be forced to accept payment in assets exposed to volatility or credit risk—limiting broader adoption and scalability.
The ECB said Pontes is expected to launch in the third quarter of 2026, allowing market participants to settle DLT-based transactions directly in central bank money. The initiative builds on the ECB’s broader Appia project, unveiled earlier this month, which aims to outline a blueprint for Europe’s tokenized financial ecosystem by 2028.
Legal clarity and coordination needed
Beyond settlement infrastructure, Cipollone emphasized the need for stronger legal frameworks and closer collaboration between public and private sectors.
A key component of the Appia initiative focuses on interoperability standards, ensuring tokenized assets can move seamlessly across different DLT platforms through shared data formats and smart contract standards.
He called on banks, custodians, infrastructure providers, and technology firms to contribute feedback to the Appia roadmap, encouraging deeper public-private partnerships.
Cipollone also suggested that Europe may ultimately require a dedicated legal framework to support the issuance and transfer of tokenized assets across the region.
While he described the European Commission’s proposal to extend the DLT Pilot Regime as a positive step, he cautioned that relying on fragmented regulations risks undermining the full potential of tokenization.
His remarks follow recent input from Circle, which urged EU policymakers to expand the DLT Pilot Regime and allow crypto-asset service providers to offer cash account services for e-money tokens.
