ECB launches Pontes for tokenised asset settlement

The Eurosystem launched Pontes on September 21, a platform that links market distributed ledger technology (DLT) networks with its TARGET Services to settle wholesale tokenised asset transactions in central bank money. The European Central Bank’s announcement describes the launch as the first step in its strategy for tokenised finance. The system is intended to give market participants a central bank settlement option for transactions recorded on DLT platforms.

How does Pontes handle the cash leg?

Pontes supports two settlement routes: participants can use cash tokens on the Eurosystem’s DLT platform, or settle through T2, the Eurosystem’s real-time gross settlement system. The ECB says the cash leg reaches final settlement in central bank money when the corresponding transaction is completed in T2.

For delivery versus payment, where an asset and its payment must settle together or not at all, Pontes uses the Hash-Link protocol. The mechanism synchronises settlement across platforms. The ECB says the system also supports end-to-end processing and interaction with T2, with the aim of reducing manual intervention.

Tokenisation represents an asset as a digital token, typically recorded on a DLT network. Pontes connects those market networks to existing Eurosystem payment infrastructure; it does not require the market asset and the cash settlement to use the same ledger.

Who is ready to use Pontes?

The ECB says an initial group of market participants and DLT operators has completed onboarding and is ready to use the platform. Its announcement names 13 market participants, including Deutsche Bank, Santander and the European Investment Bank, and four market DLT operators: Axiology, Cashlink, Clearstream and SWIAT. The Deutsche Bundesbank has also onboarded as a market participant.

The ECB’s Pontes design overview says eligible market participants must have access to T2. Eligible operators include authorised central securities depositories and operators of DLT settlement or trading and settlement systems. The initial access model is therefore aimed at financial market participants and infrastructure operators, rather than retail users.

What is still due after the launch?

The September launch provides a core set of services. The ECB says features and operating hours will expand gradually, with full implementation expected by 2028. It has not specified in the launch announcement when particular additions will arrive.

The announcement confirms that participants are onboarded and ready to start using Pontes. It does not report completed transaction volumes or name any settled trades. The launch establishes the settlement link; how quickly institutions use it at scale remains to be seen.