ECB to Invest Part of Reserves in Tokenized Securities, Testing Blockchain-Based Market Operations

The European Central Bank plans to invest a small portion of its reserves in tokenized securities and directly test blockchain-based financial market operations using its own settlement platform, from purchases and settlement to asset management.

CoinDesk reported on Sept. 21 that the ECB plans to allocate a small share of its reserves to tokenized securities. The initial investments will focus on euro-denominated securities issued mainly by euro-area member states, local governments, public institutions and European supranational bodies.

The Eurosystem’s new platform, Pontes, will be used for trade settlement. The infrastructure connects blockchain-based financial markets with the ECB’s payment system, allowing institutional transactions in tokenized assets to be settled in central bank money.

The ECB plans to go beyond simply providing infrastructure and test tokenized financial technology directly from an investor’s standpoint. It will review the entire process, starting with purchases of tokenized bonds and extending to trade settlement and portfolio management.

Piero Cipollone, a member of the ECB’s Executive Board, said Pontes would bring the stability and trust of central bank money to Europe’s tokenized finance ecosystem. He added that this would provide an important advantage in supporting the market’s expansion.

The ECB’s Executive Board will decide the size, timing and management approach for the investment after preparatory work is completed. The decision will also reflect the scale of tokenized securities issuance and the growth of Europe’s tokenized finance market.

Pontes is the first step in the Eurosystem’s strategy to combine central bank money with tokenized finance. The ECB plans to expand support services and extend operating hours as it works toward a full rollout of the system by 2028.