Madouros urges tokenisation safeguards and non-bank resilience
Central Bank of Ireland Deputy Governor Vasileios Madouros called for integrated tokenised markets and stronger safeguards for non-bank finance. At the European Capital Markets Institute conference, he urged coordinated legal, monetary and regulatory foundations.
Connecting Europe's tokenised markets
Madouros said tokenisation offers faster settlement, lower costs and 24/7 availability, but technology alone cannot overcome fragmentation.
Since September, Pontes has enabled wholesale on-chain settlement in central bank money; Appia supports an integrated ecosystem through public-private cooperation.
He called for legal clarity on ownership, smart contracts and settlement finality, interoperable tokenised bank deposits and more tokenised sovereign collateral.
He opposed a separate regulatory framework for tokenised finance, while identifying necessary changes to custody, operational resilience and fund liquidity rules.
Following its March discussion paper, the Central Bank of Ireland plans time-bound industry sprints and a Tokenisation Access Point for engagement.
Non-banks require system-wide oversight
Non-banks hold around 55 percent of euro area financial assets, up from around 35 percent in the early 2000s.
Madouros said faster collateral mobility can facilitate leverage and transmit liquidity shocks.
He urged market-wide stress assessments, better data sharing and implementation of international reforms on open-ended fund liquidity and non-bank leverage.
Ireland has introduced leverage measures for property and liability-driven investment funds.
European supervisors have also agreed guidance on higher money market fund liquidity and its usability.
Liquidity support remains unresolved
Madouros identified gaps in crisis-management powers for failing non-bank payment providers and stablecoin issuers.
He left open whether Europe needs liquidity facilities for non-banks, as in the UK and Canada.
Central bank balance-sheet risks and moral hazard remain explicit constraints.